FORM 10-K - StockProInfo

					FORM 10-K
DEAN FOODS CO - DF
Filed: March 16, 2005 (period: December 31, 2004)
Annual report which provides a comprehensive overview of the company for the past year
                  Table of Contents
10-K - FORM 10-K



PART I

Item 1.   Business
Item 2.   Properties
Item 3.   Legal Proceedings
Item 4.   Submission of Matters to a Vote of Security Holders


PART II

Item 5.   Market for Our Common Stock and Related Matters
Item 6.   Selected Financial Data
Item 7.   Management s Discussion and Analysis of Financial Condition and Results of
          Operations
Item      Quantitative and Qualitative Disclosures About Market Risk
7A.
Item 8.   Consolidated Financial Statements
Item 9.   Changes in and Disagreements With Accountants on Accounting and Financial
          Disclosure
Item      Controls and Procedures
9A.


PART III

Item 10. Directors and Executive Officers
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
         Stockholder Matters
Item 13. Certain Relationships and Related Transactions
Item 14. Principal Accountant Fees and Services


PART IV

Item 15. Exhibits and Financial Statement Schedules
EX-10.1 (7TH AMENDED AND RESTATED 1997 STOCK OPTION RESTRICTED STOCK
PLAN)
EX-10.2 (3RD AMENDED AND RESTATED 1989 STOCK AWARDS PLAN)

EX-10.4 (POST-2004 EXECUTIVE DEFERRED COMPENSATION PLAN)

EX-10.6 (EXECUTIVE INCENTIVE COMPENSATION PLAN)
EX-10.8 (SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN)

EX-10.9 (DESCRIPTION OF COMPENSATION ARRANGEMENTS FOR EXECUTIVE
OFFICERS)
EX-10.10 (SUMMARY OF COMPENSATION PAID TO NON-EMPLOYEE DIRECTORS)

EX-10.13 (EMPLOYMENT AGREEMENT BETWEEN TREEHOUSE FOODS)

EX-10.14 (EMPLOYMENT AGREEMENT BETWEEN TREEHOUSE FOODS)

EX-10.15 (EMPLOYMENT AGREEMENT BETWEEN TREEHOUSE FOODS)

EX-10.16 (EMPLOYMENT AGREEMENT BETWEEN TREEHOUSE FOODS)

EX-10.17 (EMPLOYMENT AGREEMENT BETWEEN TREEHOUSE FOODS)

EX-10.26 (2ND AMENDMENT TO 3RD AMENDED AND RESTATED RECEIVABLES
PURCHASE AGREEMENT)
EX-10.27 (3RD AMENDMENT TO 3RD AMENDED AND RESTATED RECEIVABLES
PURCHASE AGREEMENT)
EX-10.30 (STOCKHOLDERS AGREEMENT)

EX-10.31 (FORM OF SUBSCRIPTION AGREEMENTS)

EX-21 (LIST OF SUBSIDIARIES)

EX-23.1 (CONSENT OF DELOITTE TOUCHE LLP)

EX-31.1 (CERTIFICATION OF CEO PURSUANT TO SECTION 302)

EX-31.2 (CERTIFICATION OF CFO PURSUANT TO SECTION 302)

EX-32.1 (CERTIFICATION OF CEO PURSUANT TO SECTION 906)

EX-32.2 (CERTIFICATION OF CFO PURSUANT TO SECTION 906)
Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents


               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                                           Washington, D.C. 20549

                                                                 Form 10-K
                                    For Annual and Transition Reports Pursuant to
                               Sections 13 or 15(d) of the Securities Exchange Act of 1934
   (Mark One)
       �                   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                           OF THE SECURITIES EXCHANGE ACT OF 1934

                           For The Fiscal Year Ended December 31, 2004

                                                                            OR

         �                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                           OF THE SECURITIES EXCHANGE ACT OF 1934
                           For the Transition Period from to

                                                      Commission File Number 001-12755

                                         Dean Foods Company
                                                    (Exact name of Registrant as specified in its charter)




                                  Delaware                                                                              75-2559681
                        (State or other jurisdiction of                                                              (I.R.S. Employer
                       incorporation or organization)                                                               Identification No.)

                                                               2515 McKinney Avenue
                                                                     Suite 1200
                                                                 Dallas, Texas 75201
                                                                   (214) 303-3400
                                                (Address, including zip code, and telephone number, including
                                                    area code, of Registrant’s principal executive offices)

                                      Securities Registered Pursuant to Section 12(b) of the Act:

                          Title of Each Class                                                      Name of Each Exchange on Which Registered
                 Common Stock, $.01 par value                                                                New York Stock Exchange

                                 Securities Registered Pursuant to Section 12(g) of the Act:                       None
   Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes �          No �
    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K �
   Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act
Rule 12b-2). Yes �        No �
   The aggregate market value of the Registrant’s voting and non-voting common stock held by non-affiliates of the Registrant at
June 30, 2004, based on the $37.31 per share closing price for the Registrant’s common stock on the New York Stock Exchange on
Source: DEAN FOODS CO, 10-K, March 16, 2005
June 30, 2004, was approximately $5.76 billion.
     The number of shares of the registrant’s common stock outstanding as of March 11, 2005 was 150,155,790.

                                      DOCUMENTS INCORPORATED BY REFERENCE
    Portions of the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders to be held on or about May 24, 2005
(to be filed) are incorporated by reference into Part III of this Form 10-K.




                                                     TABLE OF CONTENTS

Item                                                                                                                            Page
                                                                        PART I
1                            Business                                                                                              1
                              Segments and Operating Divisions                                                                     1
                              Current Business Strategy                                                                            7
                              Developments Since January 1, 2004                                                                   8
                              Employees                                                                                           11
                              Government Regulation                                                                               11
                              Brief History                                                                                       13
                              Where You Can Get More Information                                                                  14
2                            Properties                                                                                           16
3                            Legal Proceedings                                                                                    19
4                            Submission of Matters to a Vote of Security Holders                                                  19
                                                                       PART II
5                            Market for Our Common Stock and Related Matters                                                      20
6                            Selected Financial Data                                                                              21
7                            Management’s Discussion and Analysis of Financial Condition and Results of Operations                23
                              Business Overview                                                                                   23
                              Results of Operations                                                                               28
                              Liquidity and Capital Resources                                                                     38
                              Known Trends and Uncertainties                                                                      43
                              Critical Accounting Policies                                                                        45
                              Recent Accounting Pronouncements                                                                    47
                              Risk Factors                                                                                        48
7A                           Quantitative and Qualitative Disclosures About Market Risk                                           50
8                            Consolidated Financial Statements                                                                    52
9                            Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                 53
9A                           Controls and Procedures                                                                              53
                                                                      PART III
10                           Directors and Executive Officers                                                                     54
11                           Executive Compensation                                                                               54
12                           Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
                             Matters                                                                                              54
13                           Certain Relationships and Related Transactions                                                       54
14                           Principal Accountant Fees and Services                                                               54
                                                                      PART IV
15                           Exhibits and Financial Statement Schedules                                                           55

Signatures                                                                                                                       S-1
7th Amended and Restated 1997 Stock Option & Restricted Stock Plan
3rd Amended and Restated 1989 Stock Awards Plan
Post-2004 Executive Deferred Compensation Plan
Executive Incentive Compensation Plan
Supplemental Executive Retirement Plan
Description of Compensation Arrangements for Executive Officers
Summary of Compensation Paid to Non-Employee Directors
Employment Agreement between Treehouse Foods, Inc. and Sam K. Reed
Employment Agreement between Treehouse Foods, Inc. and David B. Vermylen
Employment Agreement between Treehouse Foods, Inc. and E Nichol McCully
Employment Agreement between Treehouse Foods, Inc. and Thomas E. O'Neill
Employment Agreement between Treehouse Foods, Inc. and Harry J. Walsh
2nd Amendment to 3rd Amended and Restated Receivables Purchase Agreement
3rd Amendment to 3rd Amended and Restated Receivables Purchase Agreement
Stockholders Agreement
Source: DEAN FOODS CO, 10-K, March 16, 2005
Form of Subscription Agreements
List of Subsidiaries
Consent of Deloitte & Touche LLP
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents



                                                               PART I

Item 1.   Business
    We are a leading food and beverage company. Our Dairy Group is the largest processor and distributor of milk and various other
dairy products in the United States. The Dairy Group manufactures and sells its products under a variety of local and regional brand
names and under private labels. Our WhiteWave Foods Company manufactures, markets and sells a variety of well known soy, dairy
and dairy-related nationally branded products including: Silk® soymilk and cultured soy products; Horizon Organic® dairy products,
juices and other products; International Delight® coffee creamers; Marie’s® refrigerated dips and dressings; and LAND O’ LAKES®
fluid dairy and cultured products. Our Specialty Foods Group is the leading private label pickle processor in the United States and a
maker of a variety of other food products. In January 2005, we announced our intention to pursue a tax-free spin-off of our Specialty
Foods Group segment to our shareholders. See “— Developments Since January 1, 2004 — Tax Free Spin-Off of Specialty Foods
Group.” We also own the fourth largest dairy processor in Spain.
   Our principal executive offices are located at 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201. Our telephone number is
(214) 303-3400. We maintain a worldwide web site at www.deanfoods.com. We were incorporated in Delaware in 1994.

Segments and Operating Divisions
   We currently have three reportable segments: the Dairy Group, WhiteWave Foods Company (formerly the Branded Products
Group) and the Specialty Foods Group. Our reportable segments and other operating divisions are described below.

    Dairy Group
    Our Dairy Group manufactures, markets and distributes a wide variety of branded and private label dairy case products to retailers,
distributors, foodservice outlets, schools and governmental entities across the United States. The Dairy Group also manufactures a
portion of WhiteWave Foods Company’s products. See “— WhiteWave Foods Company.”
    The Dairy Group’s sales totaled approximately $8.65 billion in 2004, or approximately 80% of our consolidated sales. The
following charts graphically depict the Dairy Group’s 2004 sales by product and by channel, and indicate the percentage of private
label versus company branded sales in 2004.




(1) Includes, among other things, regular milk, flavored milks, buttermilk, half-and-half, whipping cream, dairy coffee creamers and
    ice cream mix.
(2) Includes ice cream and ice cream novelties.
(3) Includes yogurt, cottage cheese, sour cream and dairy-based dips.
(4) Includes fruit juice, fruit-flavored drinks and water.
(5) Includes, among other things, items for resale such as butter, cheese and eggs.

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Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

(6) The Dairy Group’s largest customer is Wal-Mart (including its subsidiaries, such as Sam’s Club), which accounted for 14.6% of
    the Dairy Group’s 2004 sales.
(7) Such as restaurants, hotels and other foodservice outlets.
   Products not sold under private labels are sold under the Dairy Group’s local and regional proprietary or licensed brands. Our local
and regional proprietary and licensed brands include the following:

        Northeast Region(1)        Southeast Region(1)         Midwest Region(1)         Southwest Region(1)                     Morningstar Region(1)
Chug®                         Barbers®                    Borden® (licensed brand)   Adohr Farms®                           Affair®

Dean’s®                       Broughton®                  Chug®                      Alta Dena®                             Dairy Fresh®

Garelick Farms®               Chug®                       Country Charm®             Barbe’s®                               Kohler Mix Specialties
                                                                                                            TM
Lehigh Valley®                Country Delite®             Country Fresh®             Berkeley Farms                         LAND O’LAKES® (licensed
                                                                                                                            brand)
Meadowbrook®                  Dairy Fresh®                Dean’s®                    Borden® (licensed brand)
                                                                                                TM                          Quip®
Nature’s Pride
                 TM
                              Dean’s®                     LAND O’LAKES® (licensed    Brown’s
                                                          brand)                     Chug®                                  Rod’s®
Sealtest® (licensed brand)    Frostbite®
                                                          Melody Farms®              Country Charm®                         Shenandoah’s Pride®
Shenandoah’s Pride®           Louis Trauth®
                                                          Pet® (licensed brand)      Creamland
                                                                                                     TM
Swiss Premium®                Mayfield®
                                                                     TM                              TM
                                                          Saunders                   Dairy Gold
Tuscan®                       McArthur®
                                                          Schenkel’s All*Star®       Dean’s®
                              Pet® (licensed brand)                 TM                              TM
                                                          Stroh’s                    Foremost            (licensed brand)
                                       TM
                              Purity                      Verifine®                  Gandy’s®
                              Reiter®
                                                                                     Hygeia®
                              TG Lee®
                                                                                     Meadow Gold®

                                                                                     Model®

                                                                                     Mountain High®

                                                                                     Oak Farms®

                                                                                     Poudre Valley®
                                                                                               TM
                                                                                     Price’s
                                                                                     Robinson®

                                                                                     Schepps®
                                                                                           TM
                                                                                     Swiss
                                                                                     Viva®



(1) Our Dairy Group operates in a generally decentralized manner organized by region.
    The Dairy Group sells its products primarily on a local or regional basis through its local and regional sales forces, although some
national customer relationships are coordinated by the Dairy Group’s corporate sales department. Most of the Dairy Group’s
customers, including its largest customer, purchase products from the Dairy Group either by purchase order or pursuant to contracts
that are generally terminable at will by the customer. The Dairy Group’s sales are slightly seasonal, with sales tending to be higher in
the third and fourth quarters.
   Our Dairy Group currently operates 105 manufacturing facilities in 35 states. For more information about facilities in the Dairy
Group, see “Item 2. Properties.”
    Due to the perishable nature of the Dairy Group’s products, our Dairy Group delivers the majority of its products from its facilities
directly to its customers’ stores in refrigerated trucks or trailers that we own or lease. This form of delivery is called a “direct store
delivery” or “DSD” system. We believe our Dairy Group has one of the most extensive refrigerated DSD systems in the United States.
    The primary raw material used in our Dairy Group is raw milk. We purchase our raw milk primarily from farmers’ cooperatives,
typically pursuant to requirements contracts (with no minimum purchase obligation). Raw milk is generally readily available. The
minimum price of raw milk is regulated in most parts of the country by the federal government. Several states also regulate raw milk
pricing through their own programs. For more information about raw milk pricing in the United States, see “— Government
Regulation — Milk Industry Regulation” and “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition

                                                                          2




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

and Results of Operations — Known Trends and Uncertainties — Prices of Raw Milk, Cream and Other Inputs.” Other raw materials
used by the Dairy Group, such as juice concentrates and sweeteners, in addition to packaging supplies, are generally available from
numerous suppliers and we are not dependent on any single supplier for these materials. Certain of our Dairy Group’s raw materials
and packaging supplies are purchased under long-term contracts in order to obtain lower costs. The prices of our raw materials
increase and decrease based on supply and demand.
    The Dairy Group generally increases or decreases the prices of its fluid dairy products on a monthly basis in correlation to
fluctuations in the costs of raw materials and packaging supplies. However, in some cases, we are competitively or contractually
constrained with respect to the means and/or timing of price increases, especially in the event of rapidly increasing raw milk prices.
This can have a negative impact on the Dairy Group’s profitability.
    The dairy industry is a mature industry that has traditionally been characterized by slow to flat growth, low profit margins,
fragmentation and excess capacity. Excess capacity resulted from the development of more efficient manufacturing techniques, the
establishment of captive dairy manufacturing operations by some grocery retailers and declining demand for fluid milk products.
Since 1990, the dairy industry has experienced significant consolidation led in part by us. Consolidation has tended to lower costs and
raise efficiency. However, per capita consumption of traditional fluid dairy products has continued to decline. According to the United
States Department of Agriculture (“USDA”), per capita consumption of fluid milk and cream decreased by over 10% from 1990 to the
end of 2003, although total consumption has remained relatively flat over the same period due to population increases. Therefore,
volume growth across the industry generally remains flat to modest, profit margins generally remain low and excess manufacturing
capacity continues to exist. In this environment, price competition is particularly intense, as smaller processors struggle to retain
enough volume to cover their fixed costs. In response to this dynamic, and due to the significant competitive pressure caused by the
ongoing consolidation among food retailers, many processors, including us, are now placing an increased emphasis on product
differentiation and cost reduction in an effort to increase consumption, sales and margins.
    Our Dairy Group has several competitors in each of our major product and geographic markets. Competition between dairy
processors for shelf-space with retailers is based primarily on price, service and quality, while competition for consumer sales is based
on a variety of factors such as brand recognition, price, taste preference and quality. Dairy products also compete with many other
beverages and nutritional products for consumer sales.
   For more financial information about our Dairy Group’s recent operations, see “Part II — Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and Note 20 to our Consolidated Financial Statements.

    WhiteWave Foods Company
    WhiteWave Foods Company’s operations have historically been conducted through three distinct operating units: White Wave,
Inc. (“White Wave”), Horizon Organic and Dean National Brand Group. We are currently in the process of consolidating these three
operating units and expect the consolidation to be completed in 2006.
   WhiteWave Foods Company develops, manufactures, markets and sells a variety of nationally branded soy, dairy and dairy-related
products, such as Silk soymilk and cultured soy products; Horizon Organic dairy products, juices and other products; International
Delight coffee creamers; and LAND O’LAKES creamers and cultured products. WhiteWave Foods Company also sells Sun Soy®
soymilk; The Organic Cow of Vermont® organic dairy products; White Wave® and Tofu Town® branded tofu; Hershey’s® milks and
milkshakes; Marie’s dips and dressings; and Naturally Yours® sour cream. We license the LAND O’LAKES and Hershey’s names
from third parties.
   Other branded products sold by WhiteWave Foods Company include Mocha Mix® non-dairy liquid coffee creamer and Second
Nature® egg substitute. In connection with our planned spin-off of our Specialty

                                                                    3




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

Foods Group segment in the third quarter of 2005, we intend to transfer the Mocha Mix and Second Nature businesses to our Specialty
Foods Group segment, effective as of the time of the spin-off. Finally, a small portion (approximately 3% in 2004) of WhiteWave
Foods Company’s sales is private label soymilk and organic dairy products.
   WhiteWave Foods Company’s sales totaled approximately $1.19 billion in 2004, or approximately 11% of our consolidated sales.
    WhiteWave Foods Company sells its products to a variety of customers, including grocery stores, club stores, natural foods stores,
mass merchandisers, convenience stores and foodservice outlets. In 2004, approximately 84% of WhiteWave Foods Company’s sales
were to retailers and approximately 8% were to foodservice outlets. WhiteWave Foods Company’s customer base is diverse, with no
single customer representing more than 10% of sales in 2004. WhiteWave Foods Company sells its products through its internal sales
force and through independent brokers. The majority of WhiteWave Foods Company’s products are sold pursuant to customer
purchase order or pursuant to contracts that are generally terminable at will by the customer.
    In 2004, approximately 64% of the products sold by WhiteWave Foods Company were manufactured by our Dairy Group. An
additional 32% were manufactured by third-party manufacturers under processing agreements. WhiteWave Foods Company currently
owns two manufacturing facilities, one of which produces all of its tofu products and the other, purchased in April 2004, produces a
portion of its Silk soymilk.
   The majority of WhiteWave Foods Company’s products are delivered by common carrier to customer warehouses, although some
products are distributed through third-party distributors or through our Dairy Group’s DSD system.
    The primary raw materials used in our soy-based products are organic soybeans and organic soybean concentrate. Organic
soybeans are generally available from several suppliers and we are not dependent on any single supplier for these products. We have
entered into supply agreements for organic soybeans, which we believe will meet our needs in 2005. Generally, these agreements
provide pricing at fixed levels. The primary raw material used in our organic milk-based products is organic raw milk. Organic raw
milk supplies are constrained and the growth of our organic dairy business depends on us being able to procure sufficient quantities of
organic raw milk in time to meet our needs. We currently purchase organic raw milk from a network of approximately 300 dairy
farmers across the United States. We generally enter into supply agreements with dairy farmers, with typical terms of one to two
years, which obligate us to purchase certain minimum quantities. We also produce certain of our own organic raw milk needs in the
U.S. at two organic farms that we own and operate. We believe, based on currently projected sales levels, that we have secured a
sufficient supply of raw organic milk to meet our needs for the remainder of 2005. The primary raw material used in our LAND
O’LAKES and other non-organic dairy products is raw milk. We purchase raw milk from farmers’ cooperatives, typically pursuant to
requirements contracts (with no minimum purchase obligation). Raw milk is generally readily available. The minimum price of raw
milk is regulated in most parts of the country by the federal government. Several states also regulate raw milk pricing through their
own programs. Other raw materials used in WhiteWave Foods Company’s products, such as flavorings, organic sugar and packaging
materials, are generally available from several suppliers and we are not dependent on any single supplier for these materials. Certain
of these raw materials are purchased under contracts in order to obtain lower costs. The prices of raw materials increase and decrease
based on supply and demand. For more information, see “Part II — Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Known Trends and Uncertainties — Prices of Raw Milk, Cream and Other Inputs.”
    WhiteWave Foods Company has several competitors in each of its product markets. Competition to obtain shelf-space with
retailers for a particular product is based primarily on the expected or historical sales performance of the product compared to its
competitors. Also, in some cases, WhiteWave Foods Company pays fees to retailers to obtain shelf-space for a particular product.
Competition for consumer sales is based on many different factors, including brand recognition, price, taste preferences and quality.
Consumer demand for soy and organic foods has grown rapidly in recent years due to growing consumer confidence in the health
benefits of soy and organic foods, and WhiteWave Foods Company has a leading position in the soy and

                                                                   4




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

organic foods category. However, our soy and organic food products compete with many other beverages and nutritional products for
consumer sales.
   For more information about our WhiteWave Foods Company, see “Part II — Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and Note 20 to our Consolidated Financial Statements.

    Specialty Foods Group
    Our Specialty Foods Group is the nation’s leading private label pickle processor, and the largest manufacturer and seller of private
label non-dairy powdered creamer in the United States. The Specialty Foods Group also manufactures and sells a variety of other
foods, such as aseptic sauces and puddings. In January 2005, we announced our intention to pursue a tax-free spin-off of our Specialty
Foods Group to our shareholders. See “— Developments Since January 1, 2004 — Tax Free Spin-Off of Specialty Foods Group.”
    The Specialty Foods Group’s sales totaled $676.8 million in 2004, or approximately 6% of our consolidated sales. The following
charts graphically depict the Specialty Foods Group’s 2004 sales by product category and channel, and indicate the percentage of
private label sales versus company branded sales in 2004.




(1) Approximately 75% of the Specialty Foods Group’s pickle, relish and pepper products are sold under private labels, with the
    remaining 25% sold under our proprietary brands including Farmans®, Nalley’s®, Peter Piper® and Steinfeld™. Branded
    pickle products are sold to retailers. Private label products are sold to retailers, foodservice customers and in bulk to other food
    processors.
(2) Non-dairy powdered creamer is used as a coffee creamer and as an ingredient in baking, beverage mixes, gravies and sauces. In
    2004, Specialty Foods Group sold 14% of its non-dairy powdered creamer under our Cremora® brand, while the rest of the
    Specialty Foods Group’s creamer products were sold under private labels to retailers, distributors and in bulk to other food
    companies for use as ingredients in their products.
(3) Aseptic products are sterilized, which allows storage for prolonged periods without refrigeration. Our Specialty Foods Group
    manufactures aseptic cheese sauces and puddings. Our cheese sauces and puddings are sold primarily under private labels to
    distributors. In 2004, our Specialty Foods Group also sold aseptic nutritional beverages in the meal supplement, weight loss/gain
    and sports categories, all of which were sold under customer brands to retailers and distributors. In the fourth quarter of 2004, we
    exited the nutritional beverage business due largely to significant declines in volume.
(4) Includes shrimp, seafood, tartar, horseradish, chili, sweet and sour sauces and syrups sold to retail grocers in the eastern,
    midwestern and southern United States. These products are sold under the Bennett’s®, Hoffman House® and
    Roddenberry®Northwoods® brand names.

                                                                   5




Source: DEAN FOODS CO, 10-K, March 16, 2005
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(5) Includes mass merchandisers, club stores, convenience stores and grocery stores. The Specialty Foods Group’s largest customer
    is Wal-Mart (including its subsidiaries, such as Sam’s Club) which accounted for 10.1% of the Specialty Foods Group’s 2004
    sales.
   The Specialty Foods Group’s products are delivered to customers’ stores and warehouses primarily by common carrier. The
Specialty Foods Group sells its products through its internal sales force and through independent brokers. Most of the Specialty Foods
Group’s customers purchase products from the Specialty Foods Group either by purchase order or pursuant to contracts that are
generally terminable at will by the customer.
   Our Specialty Foods Group uses a wide variety of raw materials. The main raw material used by the Specialty Foods Group is
cucumbers. The Specialty Foods Group purchases cucumbers under seasonal grower contracts with a variety of growers. We supply
seeds and advise growers regarding planting techniques. We also monitor and arrange proper agricultural practices. Other raw
materials used by the Specialty Foods Group, such as corn syrup, soy bean oil and casein, in addition to packaging materials, are
generally available from numerous suppliers and we are not dependent on any single supplier for these materials. Certain of the
Specialty Foods Group’s raw materials and packaging supplies are purchased under long-term contracts in order to obtain lower costs.
The prices of the Specialty Foods Group’s raw materials increase or decrease based on supply and demand.
   The Specialty Foods Group produces its products in 10 facilities located across the United States. For more information about the
Specialty Foods Group’s manufacturing facilities, see “Item 2. Properties.”
    The Specialty Foods Group has several competitors in each of its product markets. In sales of private label products, the principal
competitive factors are price relative to other private label suppliers, product quality and quality of service. For the Specialty Foods
Group’s branded products, competition to obtain shelf-space with retailers is based on the expected or historical sales performance of
the product compared to its competitors. In certain cases, the Specialty Foods Group pays fees to retailers to obtain shelf-space for a
particular company-branded product. Competition for consumer sales is based on brand recognition, price, taste preferences and
quality.

    International Group
    Our International Group manufactures, markets and sells private label and branded milk, butter and cream through its internal sales
force to retailers and distributors across Spain and Portugal. The International Group’s sales totaled $310.7 million in 2004, or
approximately 3% of our consolidated sales.
   The following charts graphically depict the International Group’s 2004 sales by product category and channel, and indicate the
percentage of private label sales versus company branded sales in 2004.




(1) All of our International Group’s fluid dairy products are pasteurized at ultra-high temperatures (“UHT”).

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Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

(2) Our International Group’s largest customers in 2004 were Carrefour, S.A., Lidl Supermercados S.A., and Eroski Sociedad
    Cooperativa, which accounted for approximately 25.2%, 11.2% and 10.8% of the International Group’s 2004 sales, respectively.
(3) Including our proprietary Celta®, Campobueno®, Milsani® and La Vaquera® brands.
    Our International Group manufactures its products in five facilities in Spain and Portugal. For more information about our
International Group facilities, see “Item 2. Properties.” In the fourth quarter of 2004 we completed construction of a new facility,
located in Alpiarca, Portugal, which commenced production in December 2004. Our International Group operates its business
primarily from its headquarters located in Pontedeume, Galicia, Spain.
    The long shelf life of our International Group’s UHT fluid milk products allows delivery by common carrier. Most of the
International Group’s customers purchase our products either by purchase order or by contracts that are generally terminable at will by
the customer. Our International Group’s sales are slightly seasonal, with sales tending to be lower in the third quarter.
    The primary raw material used by our International Group is raw milk. We purchase our raw milk from farmers’ cooperatives and
other intermediaries pursuant to formal and informal contractual arrangements. Raw milk production volume is regulated by European
Union quotas, which sometimes limit the availability of raw milk to processors. The price of raw milk is defined solely by supply and
demand and can fluctuate widely. Our International Group purchases its packaging materials from two leading suppliers. Packaging
materials represent a significant portion of our International Group’s raw material costs and are purchased under long-term contracts
in order to obtain lower costs.
    The Iberian fluid dairy market, which includes Spain and Portugal, is characterized by relatively high per capita consumption and
the UHT “brick pack” format dominates the industry. The combination of these factors makes the Iberian region one of the largest
UHT markets in the world. The Iberian fluid dairy market has been characterized over the past 20 years by slow growth in the core
products and faster growth for value-added products such as nutritionally enriched milks. The Iberian fluid dairy industry is highly
competitive, with leading companies investing heavily in innovation and branding. The industry has undergone significant
consolidation in the past 5 to 10 years leading to the emergence of several national brands, including our Celta brand. Our
International Group competes with all the leading fluid dairy processors operating in the Iberian region. Competition between dairy
processors for private label business has intensified recently as a result of retailer consolidation, and is based primarily on price,
service and quality. Competition for branded sales to consumers is based on a number of factors, including brand recognition, price
and quality.
    Effective January 1, 2005, our Rachel’s Organic Dairy business, which has historically been a part of Horizon Organic’s
operations, was transferred to the International Group. Rachel’s Organic Dairy, which markets and sells organic dairy products across
the United Kingdom, has one facility located in Aberystwth, Wales. The preceding discussion excludes Rachel’s Organic Dairy.

Current Business Strategy
    Maximize Dairy Group Performance
    As the largest dairy processor in the United States, our Dairy Group is in a unique position to provide unmatched service,
convenience and value to our customers. We are intently focused on maintaining and extending our Dairy Group’s leadership position
by focusing on our customers’ needs.
    In 2004, our Dairy Group was successful in maintaining its sales volume despite extremely volatile raw milk prices and declining
overall demand for dairy products in the United States, which we believe indicates that we are gaining market share. However, Dairy
Group profitability suffered in 2004 due to an extremely competitive retail environment and a difficult raw material environment, as
well as unusually high fuel and energy costs. We closed eight Dairy Group facilities in 2004 in an effort to reduce our cost structure.
In 2005, we are focused on maintaining and growing our Dairy Group’s sales volume by continuing to provide our customers with the
highest level of service, quality and value, while at the same time further reducing our cost

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structure through rationalization of manufacturing and distribution networks and more efficient utilization of technology and other
efficiency initiatives.

    Consolidate and Reorganize WhiteWave Foods Company
    In the third quarter of 2004, we announced our intention to consolidate the three businesses included within our WhiteWave Foods
Company segment (formerly the Branded Products Group segment) into a single operating unit. We believe this consolidation will
allow us to interact with customers more efficiently and effectively as a single sales and marketing organization, and will enable us to
create a simplified and more efficient supply chain for our branded business. We have completed the consolidation of the sales,
marketing and research and development organization for the three companies, and in the third quarter of 2005, the employees of the
new company will move to a new headquarters located in Broomfield, Colorado. The full integration of these businesses will be a
lengthy process involving all aspects of the three companies’ operations, including purchasing, manufacturing, distribution and
administration, and will include the selection and implementation of a new information technology platform. As part of our overall
reorganization of WhiteWave Foods Company into a unified branded consumer packaged goods company, we also intend to bring
in-house certain manufacturing activities that are currently being done by third parties. We expect the consolidation to be completed
within the next 12 to 18 months. One of our primary strategic objectives in 2005 is the successful continuation of the consolidation
and reorganization process.
    In addition, effective March 11, 2005, Mr. Steve Demos, President of WhiteWave Foods Company resigned his position. We have
retained a leading executive recruiting firm to assist in the search for a new president. Mr. Gregg Engles, our Chairman of the Board
and Chief Executive Officer, has assumed direct leadership of WhiteWave Foods Company on an interim basis.

    Invest in the Growth and Profitability of our Brands
    In 2005, we intend to continue to invest in aggressively marketing our WhiteWave Foods Company brands, with an emphasis on
our largest and most successful brands: Silk, Horizon Organic, International Delight and LAND O’LAKES. Further, we will continue
to make capital expenditures allowing us to increase internal manufacturing, which we believe will allow us to better manage our
working capital and increase profitability.

Developments Since January 1, 2004
   Reorganization of WhiteWave Foods Company
   In the third quarter of 2004, we announced our intent to consolidate the three businesses included within WhiteWave Foods
Company. See “— Current Business Strategy” above.

    Tax-Free Spin-Off of Specialty Foods Group
    On January 27, 2005, we announced our intent to pursue a tax-free spin-off of our Specialty Foods Group. The spin-off will create
a publicly traded food manufacturing company serving the retail grocery and foodservice markets with approximately 1,800
employees and estimated 2005 net sales of over $700 million. Also effective January 27, 2005, we hired a new management team,
headed by Sam Reed, former CEO of Keebler Foods Company, to lead the new company. In conjunction with their employment, the
management team made a cash investment of $10 million in the Specialty Foods Group, representing 1.7% ownership of the new
business.
    As part of the spin-off, we intend to transfer our Mocha Mix® non-dairy creamer, Second Nature® egg substitute and foodservice
salad dressings businesses to the Specialty Foods Group from WhiteWave Foods Company and our Dairy Group.
    The spin-off is intended to take the form of a tax-free distribution to our shareholders of a new publicly traded stock, which we
expect to be listed on the New York Stock Exchange. We expect the spin-off to be completed in the third quarter of 2005, subject to
confirmation by the Internal Revenue Service of the tax-free nature of the transaction, registration of the new security with the
Securities and Exchange Commission and other customary closing conditions.

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    Acquisitions
    Milk Products of Alabama
    On October 15, 2004 our Dairy Group acquired Milk Products of Alabama, a dairy manufacturer based in Decatur, Alabama. Milk
Products of Alabama had net sales of approximately $34 million in 2003. As a result of this acquisition, we have expanded our
production capabilities in the southeastern United States, allowing us to better serve our customers. Milk Products of Alabama’s
results of operations are now included in the Morningstar division of our Dairy Group. We paid approximately $23.2 million for the
purchase of Milk Products of Alabama, including costs of acquisition, and funded the purchase price with borrowings under our senior
credit facility.

    Tiger Foods
    On May 31, 2004, Leche Celta, our Spanish subsidiary, acquired Tiger Foods, a dairy processing business with one facility located
in Avila, Spain. Tiger Foods, which had net sales of approximately $29 million in 2003, manufactures and distributes branded and
private label UHT milk and dairy-based drinks throughout Spain, with an emphasis in the southern and central regions. Tiger Foods’
operations complement our Spanish operations and we expect this acquisition to allow us to reduce our transportation costs for raw
milk and finished products due to the new facility’s geographic proximity to our raw milk suppliers and certain customers. We paid
approximately $21.9 million for the purchase of the company, all of which was funded with borrowings under our senior credit
facility.

    Soy Processing Facility
    On April 5, 2004, WhiteWave Foods Company acquired a soy processing and packaging facility located in Bridgeton, New Jersey.
Prior to the acquisition, the previous owner of the facility co-packed Silk products for us at the facility. As a result of the acquisition,
we have increased our in-house processing and packaging capabilities for our soy products, resulting in cost reductions. We paid
approximately $25.7 million for the purchase of the facility, all of which was funded using borrowings under our senior credit facility.

    LAND O’LAKES East
    In 2002, we purchased a perpetual license to use the LAND O’LAKES brand on certain dairy products nationally, excluding cheese
and butter. This perpetual license was subject, however, to a pre-existing sublicense entitling a competitor to manufacture and sell
cream, sour cream and whipping cream in certain channels in the eastern United States. Effective March 31, 2004, we acquired that
sublicense and certain customer relationships of the sublicensee (“LAND O’LAKES East”) for an aggregate purchase price of
approximately $17 million, all of which was funded using borrowings under our senior credit facility. We now have the exclusive
right to use the LAND O’LAKES brand on certain dairy products (other than cheese and butter) throughout the entire United States.

    Ross Swiss Dairies
    On January 26, 2004, our Dairy Group acquired Ross Swiss Dairies, a dairy distributor based in Los Angeles, California, which
had net sales of approximately $120 million in 2003. As a result of this acquisition, we have increased the distribution capability of
our Dairy Group in southern California, allowing us to better serve our customers. Ross Swiss Dairies historically purchased a
significant portion of its products from other processors. Now the majority of products distributed by Ross Swiss Dairies are
manufactured in our southern California facilities. We paid approximately $21.8 million, including transaction costs, for the purchase
of Ross Swiss Dairies and funded the purchase price with borrowings under our receivables-backed facility.

   Horizon Organic
   On January 2, 2004, we completed the acquisition of the 87% of Horizon Organic Holding Corporation (“Horizon Organic”) that
we did not already own. Horizon Organic had sales of over $200 million during

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2003. We already owned approximately 13% of the outstanding common stock of Horizon Organic as a result of investments made in
1998. Third-party co-packers, including us, have historically done all of Horizon Organic’s manufacturing. During 2003, we produced
approximately 27% of Horizon Organic’s fluid dairy products. We also distributed Horizon Organic’s products in several parts of the
country. Horizon Organic is a leading branded organic foods company in the United States. Because organic foods are gaining
popularity with consumers and because Horizon Organic’s products offer consumers an alternative to our Dairy Group’s traditional
dairy products, we believe Horizon Organic is an important addition to our portfolio of brands. The aggregate purchase price for the
87% of Horizon Organic that we did not already own was approximately $287 million, including approximately $217 million of cash
paid to Horizon Organic’s stockholders, the repayment of approximately $40 million of borrowings under Horizon Organic’s former
credit facility, and transaction expenses of approximately $9 million, all of which was funded using borrowings under our senior credit
facility and our receivables-backed facility. In addition, each of the options to purchase Horizon Organic’s common stock outstanding
on January 2, 2004 was converted into an option to purchase .7301 shares of our stock, with an aggregate fair value of approximately
$21 million. Beginning with the first quarter of 2004, Horizon Organic’s financial results are reported as part of our WhiteWave Foods
Company segment.
   See Note 2 to our Consolidated Financial Statements for more information about our acquisitions.

    Facility Closing and Reorganization Activities
   As part of our continued reorganization and cost reduction efforts in our Dairy Group, we closed eight Dairy Group facilities in
2004. The closed facilities were located in Lansing, Michigan; Wilkesboro, North Carolina; Madison, Wisconsin; Sulphur Springs,
Texas; San Leandro and South Gate, California; Westwego, Louisiana and Pocatello, Idaho.
    On September 7, 2004, we announced our plan to exit the nutritional beverages business operated by our Specialty Foods Group
segment, including the closure of a manufacturing facility in Benton Harbor, Michigan. In 2004, we experienced significant declines
in volume on this product line and we believed those volumes could not be replaced without a significant investment in capital and
research and development. We ceased nutritional beverages production in December 2004.
    We recorded a total of approximately $34.7 million in facility closing and reorganization costs during 2004. We expect to incur
additional charges related to these restructuring plans of approximately $7.1 million, primarily in 2005. These charges include the
following costs:
    • Workforce reductions as a result of facility closings, facility reorganizations and consolidation of administrative functions;
    • Shutdown costs, including those costs necessary to prepare abandoned facilities for closure;
    • Costs incurred after shutdown such as lease obligations or termination costs, utilities and property taxes;
    • Costs associated with the reorganization of WhiteWave Foods Company’s supply chain and distribution activities, including
      termination of certain contractual agreements; and
    • Write-downs of property, plant and equipment and other assets, primarily for asset impairments as a result of facilities that are no
      longer used in operations. The impairments relate primarily to owned buildings, land and equipment at the facilities, which are
      written down to their estimated fair value and held for sale.
    See Note 15 to our Consolidated Financial Statements for more information regarding our facility closing and reorganization
activities.

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    Construction of New Facilities
    During 2004, our Dairy Group completed construction of a new dairy manufacturing and distribution facility in Las Vegas,
Nevada. This facility commenced operations in the third quarter of 2004 and allows us to better serve the southern Nevada, Arizona,
and southern Colorado markets. In addition, Leche Celta finished construction of our first dairy manufacturing facility in Portugal in
the fourth quarter of 2004. The new facility is located in Alpiarca, Portugal and commenced production in December 2004. The new
facility allows us to expand our Iberian operations.

    Stock Buyback
   During 2004, we spent approximately $297 million, including commissions and fees, to repurchase 9.3 million shares of our
common stock for an average purchase price of $31.90 per share. At March 11, 2005, approximately $118 million remained available
under our current authorization. See Note 11 to our Consolidated Financial Statements and “Part II — Item 5. Market for Our
Common Stock and Related Matters.”

    Amendment to Credit Facility
    In August 2004, we amended our senior credit facility to (1) increase the size of our revolving credit facility from $1 billion to
$1.5 billion, (2) increase the size of our term loan A from $850 million to $1.5 billion, (3) eliminate term loans B and C and
(4) modify the interest rate and payment terms. When we amended our credit facility, we were required to write-off approximately
$32.6 million of deferred financing costs that were incurred in connection with our credit facility prior to the amendment. These costs
were being amortized over the previous terms of the revolving credit facility and term loans. See Note 9 to our Consolidated Financial
Statements.

Employees
   As of December 31, 2004 we had the following employees:
                                                                                                     No. of                  % of
                                                                                                    Employees                Total
Dairy Group                                                                                              25,730                89.9%
WhiteWave Foods Company                                                                                     570                 2.0
Specialty Foods Group                                                                                     1,700                 5.9
International Group                                                                                         450                 1.6
Corporate                                                                                                   160                 0.6
    Total                                                                                                28,610               100.0%


    Approximately 38% of the Dairy Group’s employees and approximately 54% of the Specialty Foods Group’s employees
participate in collective bargaining agreements.

Government Regulation
   Public Health
    As a manufacturer and distributor of food products, we are subject to a number of food-related regulations, including the Federal
Food, Drug and Cosmetic Act and regulations promulgated thereunder by the U.S. Food and Drug Administration (“FDA”). This
comprehensive regulatory framework governs the manufacture (including composition and ingredients), labeling, packaging and
safety of food in the United States. The FDA:
    • regulates manufacturing practices for foods through its current good manufacturing practices regulations,

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    • specifies the standards of identity for certain foods, including many of the products we sell, and
    • prescribes the format and content of certain information required to appear on food product labels.
    In addition, the FDA enforces the Public Health Service Act and regulations issued thereunder, which authorize regulatory activity
necessary to prevent the introduction, transmission or spread of communicable diseases. These regulations require, for example,
pasteurization of milk and milk products. We are subject to numerous other federal, state and local regulations involving such matters
as the licensing and registration of manufacturing facilities, enforcement by government health agencies of standards for our products,
inspection of our facilities and regulation of our trade practices in connection with the sale of food products.
    We use quality control laboratories in our manufacturing facilities to test raw ingredients. Product quality and freshness are
essential to the successful distribution of our products. To monitor product quality at our facilities, we maintain quality control
programs to test products during various processing stages. We believe that our facilities and manufacturing practices comply with all
material government regulations.

    Employee Safety Regulations
    We are subject to certain safety regulations including regulations issued pursuant to the U.S. Occupational Safety and Health Act.
These regulations require us to comply with certain manufacturing safety standards to protect our employees from accidents. We
believe that we are in material compliance with all employee safety regulations.

    Environmental Regulations
    We are subject to various environmental regulations. Ammonia, a refrigerant used extensively in our operations, is considered an
“extremely” hazardous substance pursuant to U.S. federal environmental laws due to its toxicity. Also, certain of our facilities
discharge biodegradable wastewater into municipal waste treatment facilities in excess of levels permitted under local regulations.
Because of this, certain of our subsidiaries are required to pay wastewater surcharges or to construct wastewater pretreatment
facilities. To date, such wastewater surcharges have not had a material effect on our Consolidated Financial Statements.
    We maintain above-ground or underground petroleum storage tanks at many of our facilities. These tanks are periodically
inspected to determine compliance with applicable regulations. We are required to make expenditures from time to time in order to
maintain compliance of these tanks. To date, such expenditures have not had a material effect on our Consolidated Financial
Statements.
   We do not expect environmental compliance to have a material impact on our capital expenditures, earnings or competitive
position in the foreseeable future.

    Milk Industry Regulation
   The federal government establishes minimum prices that we must pay to producers in federally regulated areas for raw milk. Raw
milk contains primarily raw skim milk, in addition to a small percentage of butterfat. The federal government establishes separate
minimum prices for raw skim milk and butterfat. Raw milk delivered to our facilities is tested to determine the percentage of butterfat,
and we pay our suppliers separate prices for the raw skim milk and butterfat based on the results of these tests.
    The federal government’s minimum prices are calculated by economic formula based on supply and demand and vary depending
on the processor’s geographic location or sales area and the type of product manufactured using the raw product. Federal minimum
prices change monthly. Class I butterfat and raw skim milk prices (which are the minimum prices we are required to pay for butterfat
and raw skim milk that is processed into milk) and Class II raw skim milk prices (which are the prices we are required to pay for raw
skim milk that is processed into products such as cottage cheese, creams, creamers, ice cream and sour cream) for each month are
announced by the federal government by the 23rd day of the immediately preceding month. Class II butterfat prices for each month
are announced on or before the fifth day after the end of that month.

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   Some states have established their own rules for determining minimum prices for raw milk. In addition to the federal or state
minimum prices, we also pay producer premiums, procurement costs and other related charges that vary by location and vendor. A
few states also have retail pricing requirements.
    In Spain, the government has established a quota system regulating the amount of milk that can be sold by individual farmers and
farm cooperatives, which affects the prices we pay for raw milk.

Brief History
   We commenced operations in 1988 through a predecessor entity. Our original operations consisted solely of a packaged ice
business. Since then the following activity has occurred:
                    December 1993      •      Acquired Suiza Dairy Corporation, a regional dairy processor located in Puerto Rico.
                                              We then began acquiring other local and regional U.S. dairy processors, growing our
                                              dairy business rapidly primarily through acquisitions.

                        April 1996     •      Completed our initial public offering under our former name “Suiza Foods Corporation”
                                              and began trading on Nasdaq National Market.

                      January 1997     •      Completed a secondary offering.

                       March 1997      •      Began trading on the New York Stock Exchange.

                      August 1997      •      Acquired Franklin Plastics, Inc., a company engaged in the business of manufacturing
                                              and selling plastic containers. After the acquisition, we began acquiring other companies
                                              in the plastic packaging industry.

                    November 1997      •      Acquired Morningstar Foods Inc., whose business was the predecessor to our
                                              WhiteWave Foods Company. This was our first acquisition of a company with national
                                              brands.

                        April 1998     •      Sold our packaged ice operations.

                        May 1998       •      Acquired Continental Can Company, making us one of the largest plastic packaging
                                              companies in the United States.

                         July 1999     •      Sold all of our U.S. plastic packaging operations to Consolidated Container Company in
                                              exchange for cash and a minority interest in the purchaser.

                      January 2000     •      Acquired Southern Foods Group, L.P., the third largest dairy processor in the United
                                              States, making us the largest dairy processor in the country.

                     February 2000     •      Acquired Leche Celta, one of the largest dairy processors in Spain.

             March and May 2000        •      Sold our European packaging operations.

                    December 2001      •      Acquired Dean Foods Company (“Legacy Dean”) and changed our name from Suiza
                                              Foods Corporation to Dean Foods Company. Legacy Dean changed its name to Dean
                                              Holding Company.

                        May 2002       •      Acquired the portion of White Wave, Inc. that we did not already own.

                      January 2004     •      Acquired the portion of Horizon Organic that we did not already own.

                      August 2004      •      Announced the consolidation of our Branded Products Group segment (now known as
                                              WhiteWave Foods Company).

                      January 2005     •      Announced our intention to pursue a tax-free spin-off of our Specialty Foods Group.

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Minority Holdings
    We own an approximately 27% interest in Consolidated Container Company (“CCC”), one of the nation’s largest manufacturers of
rigid plastic containers and our largest supplier of plastic bottles and bottle components. We have owned a minority interest in CCC
since July 1999 when we sold our U.S. plastic packaging operations to CCC. Vestar Capital Partners controls CCC through a majority
ownership interest. Less than 1% of CCC is owned indirectly by Alan Bernon, a member of our Board of Directors, and his brother
Peter Bernon. Pursuant to our agreements with Vestar, we control 2 of the 7 seats on CCC’s Management Committee. We also have
entered into various supply agreements with CCC pursuant to which we have agreed to purchase certain of our requirements for
plastic bottles and bottle components from CCC. In 2004, we spent approximately $235.5 million on products purchased from CCC
and $3.2 million to purchase equipment previously owned and operated by CCC. Because CCC has issued certain senior notes, CCC
files annual, quarterly and other reports with the Securities and Exchange Commission. More information about CCC can be found on
its website at www.cccllc.com or in its filings with the Securities and Exchange Commission available at www.sec.gov.
   See Note 3 to our Consolidated Financial Statements for more information about our investment in CCC.

Where You Can Get More Information
   Our fiscal year ends on December 31. We furnish our stockholders with annual reports containing audited financial statements. In
addition, we file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange
Commission. Legacy Dean, which is now known as Dean Holding Company and is a wholly owned subsidiary of ours, also files
annual, quarterly and current reports with the Securities and Exchange Commission.
   You may read and copy any reports, statements or other information that we or Dean Holding Company file with the Securities
and Exchange Commission at the Securities and Exchange Commission’s Public Reference Room at 450 Fifth Street, N.W.,
Washington D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the Securities
and Exchange Commission. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the
operation of the Public Reference Room.
    We file our reports with the Securities and Exchange Commission electronically via the Securities and Exchange Commission’s
Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”). The Securities and Exchange Commission maintains an
Internet site that contains reports, proxy and information statements, and other information regarding companies that file electronically
with the Securities and Exchange Commission via EDGAR. The address of this Internet site is http://www.sec.gov.
    We also make available free of charge through our website at www.deanfoods.com our annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or
furnish it to, the Securities and Exchange Commission.

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   Our Code of Ethics, which is applicable to all of our employees and directors, is available on our corporate website at
www.deanfoods.com, together with the Corporate Governance Principles of our Board of Directors and the charters of all of the
Committees of our Board of Directors. Any waivers that we may grant to our executive officers or directors under the Code of Ethics,
and any amendments to our Code of Ethics, will be posted on our corporate website. If you would like hard copies of any of these
documents, or of any of our filings with the Securities and Exchange Commission, write or call us at:
       Dean Foods Company
       2515 McKinney Avenue, Suite 1200
       Dallas, Texas 75201
       (214) 303-3400
       Attention: Investor Relations

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Item 2. Properties
Dairy Group
   Our Dairy Group currently conducts its manufacturing operations from the following facilities, most of which are owned:
                                                                     Number of
                             Region                                   Facilities                     Locations of Facilities
Northeast                                                                    15          • Bangor, Maine
                                                                                         • Lynn, Massachusetts
                                                                                         • Franklin, Massachusetts
                                                                                         • Mendon, Massachusetts
                                                                                         • Burlington, New Jersey
                                                                                         • Union, New Jersey
                                                                                         • Rensselaer, New York
                                                                                         • Akron, Ohio
                                                                                         • Belleville, Pennsylvania
                                                                                         • Erie, Pennsylvania
                                                                                         • Lansdale, Pennsylvania
                                                                                         • Lebanon, Pennsylvania
                                                                                         • Schuylkill Haven, Pennsylvania
                                                                                         • Sharpsville, Pennsylvania
                                                                                         • Springfield, Virginia
Southeast                                                                    20          • Birmingham, Alabama (2)
                                                                                         • Louisville, Kentucky
                                                                                         • Newport, Kentucky
                                                                                         • Orange City, Florida
                                                                                         • Orlando, Florida
                                                                                         • Miami, Florida
                                                                                         • Baxley, Georgia
                                                                                         • Braselton, Georgia
                                                                                         • Hickory, North Carolina
                                                                                         • Winston-Salem, North Carolina
                                                                                         • Marietta, Ohio
                                                                                         • Toledo, Ohio
                                                                                         • Florence, South Carolina
                                                                                         • Spartanburg, South Carolina
                                                                                         • Athens, Tennessee
                                                                                         • Kingsport, Tennessee
                                                                                         • Nashville, Tennessee (2)
                                                                                         • Portsmouth, Virginia
Midwest                                                                      18          • Belvidere, Illinois
                                                                                         • Chemung, Illinois
                                                                                         • Huntley, Illinois
                                                                                         • O’Fallon, Illinois
                                                                                         • Rockford, Illinois
                                                                                         • Huntington, Indiana

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                                                   Number of
                             Region                 Facilities              Locations of Facilities
                                                                 • Rochester, Indiana
                                                                 • Detroit, Michigan
                                                                 • Evart, Michigan
                                                                 • Flint, Michigan
                                                                 • Grand Rapids, Michigan
                                                                 • Livonia, Michigan
                                                                 • Thief River Falls, Minnesota
                                                                 • Woodbury, Minnesota
                                                                 • Bismarck, North Dakota
                                                                 • Springfield, Ohio
                                                                 • Sioux Falls, South Dakota
                                                                 • Sheboygan, Wisconsin
Southwest                                                  38    • Buena Park, California (2)
                                                                 • City of Industry, California
                                                                 • Fullerton, California
                                                                 • Hayward, California
                                                                 • Riverside, California
                                                                 • Tulare, California
                                                                 • Delta, Colorado
                                                                 • Denver, Colorado (3)
                                                                 • Englewood, Colorado
                                                                 • Greeley, Colorado
                                                                 • Honolulu, Hawaii
                                                                 • Hilo, Hawaii
                                                                 • Boise, Idaho
                                                                 • New Orleans, Louisiana
                                                                 • Shreveport, Louisiana
                                                                 • Billings, Montana
                                                                 • Great Falls, Montana
                                                                 • Kalispell, Montana
                                                                 • Lincoln, Nebraska
                                                                 • Las Vegas, Nevada
                                                                 • Reno, Nevada
                                                                 • Albuquerque, New Mexico (2)
                                                                 • Tulsa, Oklahoma
                                                                 • Dallas, Texas (2)
                                                                 • El Paso, Texas
                                                                 • Houston, Texas
                                                                 • Lubbock, Texas
                                                                 • McKinney, Texas
                                                                 • San Antonio, Texas
                                                                 • Sulphur Springs, Texas
                                                                 • Waco, Texas
                                                                 • Orem, Utah

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                                                                       Number of
                             Region                                     Facilities                     Locations of Facilities
                                                                                           • Salt Lake City, Utah
Morningstar                                                                    14          • Decatur, Alabama
                                                                                           • City of Industry, California (2)
                                                                                           • Gustine, California
                                                                                           • Newington, Connecticut
                                                                                           • Jacksonville, Florida
                                                                                           • Thornton, Illinois
                                                                                           • Murray, Kentucky
                                                                                           • Frederick, Maryland
                                                                                           • White Bear Lake, Minnesota
                                                                                           • New Delhi, New York
                                                                                           • Sulphur Springs, Texas
                                                                                           • Mt. Crawford, Virginia
                                                                                           • Richland Center, Wisconsin

   Each of the Dairy Group’s manufacturing facilities also serves as a distribution facility. In addition, our Dairy Group has
numerous distribution branches located across the country, some of which are owned but most of which are leased. The Dairy Group’s
headquarters are located in Dallas, Texas in leased premises.

WhiteWave Foods Company
   The WhiteWave Foods Company segment owns the following properties:
                                                                       Number of
                                                                        Facilities                     Locations of Facilities
Manufacturing Facilities                                                         2         • Boulder, Colorado
                                                                                           • Bridgeton, New Jersey

    In addition, WhiteWave Foods Company conducts soy extraction operations at three Dairy Group manufacturing facilities and at
one facility owned and operated by a third-party manufacturer. WhiteWave Foods Company also owns two organic dairy farms
located in Paul, Idaho and Kennedyville, Maryland.
   WhiteWave Foods Company’s headquarters are located in leased premises in Boulder, Colorado.
Specialty Foods Group
    Our Specialty Foods Group segment currently conducts its manufacturing operations from facilities in the following locations, all
of which are owned:
                                                                       Number of
                                                                        Facilities                     Locations of Facilities
Manufacturing Facilities                                                       10          • LaJunta, Colorado
                                                                                           • New Hampton, Iowa
                                                                                           • Chicago, Illinois
                                                                                           • Dixon, Illinois
                                                                                           • Pecatonica, Illinois
                                                                                           • Plymouth, Indiana
                                                                                           • Wayland, Michigan
                                                                                           • Faison, North Carolina
                                                                                           • Portland, Oregon
                                                                                           • Green Bay, Wisconsin

   The Specialty Foods Group’s headquarters are located at its facility in Green Bay, Wisconsin.

                                                                  18




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International Group
   Our International Group currently manufactures its products from facilities in the following locations, all of which are owned:
                                                                         Number of
                                                                          Facilities                       Locations of Facilities
Manufacturing Facilities                                                           6          • Alpiarca, Portugal
                                                                                              • Avila, Spain
                                                                                              • Meira, Spain
                                                                                              • Meruelo, Spain
                                                                                              • Pontedeume, Spain
                                                                                              • Aberystwyth, United Kingdom

   The International Group’s headquarters are located in owned premises in Pontedeume, Spain.

Corporate
   Our corporate headquarters are located in leased premises at 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201.

Item 3.    Legal Proceedings
    We are not party to, nor are our properties the subject of, any material pending legal proceedings. However, we are parties from
time to time to certain claims, litigation, audits and investigations. We believe that we have established adequate reserves to satisfy
any potential liability we may have under all such claims, litigations, audits and investigations that are currently pending. In our
opinion, the settlement of any such currently pending or threatened matter is not expected to have a material adverse impact on our
financial position, results of operations or cash flows.

Item 4.    Submission of Matters to a Vote of Security Holders
    No matter was submitted by us during the fourth quarter of 2004 to a vote of security holders, through the solicitation of proxies or
otherwise.

                                                                    19




Source: DEAN FOODS CO, 10-K, March 16, 2005
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                                                                 PART II

Item 5.      Market for Our Common Stock and Related Matters
   Our common stock began trading on the Nasdaq National Market on April 17, 1996, and continued trading on the Nasdaq until
March 5, 1997, when it began trading on the New York Stock Exchange under the symbol “SZA.” We changed our trading symbol to
“DF” effective December 24, 2001. The following table sets forth the high and low sales prices of our common stock as quoted on the
New York Stock Exchange for the last two fiscal years. At March 11, 2005, there were approximately 6,054 record holders of our
common stock.
                                                                                                             High                  Low
2003:
   First Quarter                                                                                         $       28.98         $   24.76
   Second Quarter                                                                                                31.50             28.41
   Third Quarter                                                                                                 33.52             27.96
   Fourth Quarter                                                                                                33.25             30.01
2004:
   First Quarter                                                                                                 36.86             31.15
   Second Quarter                                                                                                37.40             32.76
   Third Quarter                                                                                                 37.44             29.87
   Fourth Quarter                                                                                                33.25             28.46
2005:
   First Quarter (through March 11, 2005)                                                                        35.60             31.74

    We have never declared or paid a cash dividend on our common stock. Our current intention is to retain all earnings to fund
working capital fluctuations, capital expenditures and scheduled debt repayments, and we do not anticipate paying cash dividends on
our common stock in the foreseeable future. Moreover, our senior credit facility contains certain restrictions on our ability to pay cash
dividends. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and
Capital Resources — Current Debt Obligations” and Note 9 to our Consolidated Financial Statements for further information
regarding the terms of our senior credit facility.
    The following table summarizes the repurchase of our common stock during 2004:
                                                                                                                  Maximum Number
                                                                                  At End of Period,                (or Approximate
                                                                                  Total Number of                  Dollar Value) of
                                                                                  Shares (or Units)                Shares (or Units)
                                                                                    Purchased as                     that May Yet
                                 Total Number of               Average             Part of Publicly                  be Purchased
                                 Shares (or Units)            Price Paid          Announced Plans                  Under the Plans
Period (1)                          Purchased                Per Share(2)           or Programs                     or Programs(3)
March 2004                                150,000            $     34.40                41,941,466           $           109.4 million
August 2004                             2,170,000                  36.22                44,111,466                        31.2 million
September 2004                          5,655,000                  30.67                49,766,466                        57.7 million
October 2004                            1,335,000                  29.70                51,101,466                       118.0 million
Total                                   9,310,000                  31.88


(1) Repurchases during 2004 were made only in the months listed. There have been no repurchases during the period January 1,
    2005 through March 11, 2005.
(2) Excludes fees and commissions paid on stock repurchases.
(3) Amount represents maximum amount authorized for share repurchases. The amount can be increased by actions of our Board of
    Directors.

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Item 6.       Selected Financial Data
    The following selected financial data as of and for each of the five years in the period ended December 31, 2004 has been derived
from our audited Consolidated Financial Statements. The selected financial data do not purport to indicate results of operations as of
any future date or for any future period. The selected financial data should be read in conjunction with our Consolidated Financial
Statements and related Notes.
                                                                                          Year Ended December 31
                                                           2004                2003                2002(1)               2001(1)               2000(1)
                                                                                   (Dollars in thousands except share data)
Operating data:
    Net sales(2)                                      $    10,822,285     $     9,184,616     $      8,991,464      $      5,974,555       $     5,499,712
    Cost of sales                                           8,257,756           6,808,207            6,642,773             4,574,258             4,150,170
    Gross profit                                            2,564,529           2,376,409            2,348,691             1,400,297             1,349,542
    Operating costs and expenses:
         Selling and distribution                           1,512,507           1,345,065            1,321,763               794,937              756,445
         General and administrative                           349,683             317,342              337,496               176,642              174,353
         Amortization of intangibles(3)                         6,650               4,949                7,775                51,361               49,776
         Facility closing and reorganization costs             34,695              11,787               19,050                 9,550                2,747
         Other operating (income) expense(4)                   (5,899)            (68,719)                  —                (17,306)               7,500
                 Total operating costs and expenses         1,897,636           1,610,424            1,686,084             1,015,184              990,821
Operating income                                              666,893             765,985              662,607               385,113              358,721
Other (income) expense:
    Interest expense(5)                                      204,770               181,134             197,685              103,820                 99,329
    Financing charges on trust issued preferred
      securities                                                   —                14,164              33,578               33,581                 33,595
    Equity in (earnings) losses of unconsolidated
      affiliates                                                  —                   (244)              7,899               23,620               (11,453)
    Other (income) expense, net                                 (253)               (2,625)              2,660                4,817                  (233)
                 Total other expense                         204,517               192,429             241,822              165,838               121,238
Income from continuing operations before income
  taxes                                                      462,376               573,556             420,785              219,275               237,483
Income taxes                                                 177,002               217,853             152,988               80,160                92,489
Minority interest in earnings(6)                                  —                     —                   46               31,431                29,911
Income from continuing operations                            285,374               355,703             267,751              107,684               115,083
Loss on sale of discontinued operations, net of tax               —                     —               (8,231)                  —                     —
Income from discontinued operations, net of tax                   —                     —                  879                3,592                 3,636
Income before cumulative effect of accounting
  change                                                     285,374               355,703             260,399              111,276               118,719
Cumulative effect of accounting change, net of tax                —                     —              (84,983)              (1,446)                   —
                 Net income                           $      285,374      $        355,703    $        175,416      $       109,830        $      118,719
Basic earnings per common share:
    Income from continuing operations                 $           1.85    $           2.45    $           1.98      $              1.28    $             1.36
    Income (loss) from discontinued operations                      —                   —                 (.05)                     .04                   .04
    Cumulative effect of accounting change                          —                   —                 (.63)                    (.02)                   —
               Net income                             $           1.85    $           2.45    $           1.30      $              1.30    $             1.40
Diluted earnings per common share:
    Income from continuing operations                 $           1.78    $           2.27    $           1.77      $              1.17    $             1.24
    Income (loss) from discontinued operations                      —                   —                 (.05)                     .03                   .03
    Cumulative effect of accounting change                          —                   —                 (.51)                    (.01)                   —
               Net income                             $           1.78    $           2.27    $           1.21      $              1.19    $             1.27
Average common shares:
   Basic                                                  154,635,979         145,201,412          135,031,274           84,454,194             84,585,129
    Diluted                                               160,704,576         160,695,670          163,163,904          110,676,222            110,013,792
Other data:
    Ratio of earnings to combined fixed charges
      and preferred stock dividends(7)                            3.10x               3.53x               2.78x                    2.86x             2.68x
Balance sheet data (at end of period):
    Total assets                                      $     7,756,368     $     6,992,536     $      6,582,266      $      6,691,897       $     3,780,478
    Long-term debt(8)                                       3,257,259           2,791,514            2,727,924             3,068,497             1,353,269
    Other long-term liabilities                               341,531             279,823              312,110               196,189                53,753
    Mandatorily redeemable convertible trust
      issued preferred securities                                  —                   —               585,177               584,605              584,032
    Total stockholders’ equity                              2,661,137           2,542,813            1,643,293             1,475,880              598,832

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(1) Balances for 2000 through 2002 have been adjusted to remove our Puerto Rico operations, which have been reclassified as
    discontinued operations.
(2) Net sales have been restated to reflect the adoption of Emerging Issues Task Force (“EITF”) Issue No. 01-09 “Accounting for
    Consideration Given by a Vendor to a Customer.” The net effect was to decrease net sales by $33.7 million and $29.9 million in
    2001 and 2000, respectively. There was no impact on our net income as a result of the adoption of this issue.
(3) On January 1, 2002, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other
    Intangible Assets,” which requires, among other things, that goodwill and other intangible assets with indefinite lives no longer
    be amortized and that recognized intangible assets with finite lives be amortized over their respective useful lives. As required by
    SFAS No. 142, our results for periods prior to 2002 have not been restated.
(4) Results for 2004 include a gain of $5.9 million primarily related to the settlement of litigation. Results for 2003 include a gain of
    $66.2 million on the sale of our frozen pre-whipped topping and frozen creamer operations and a gain of $2.5 million related to
    the divestiture of 11 facilities in 2001. Results for 2001 include a gain of $47.5 million on the divestiture of 11 facilities offset by
    an expense of $28.5 million resulting from a payment to a supplier as consideration for modifications to an agreement and an
    impairment charge of $1.7 million on a water plant. Results in 2000 include litigation settlement costs of $7.5 million.
(5) Results for 2004 include a charge of $32.6 million to write-off deferred financing costs related to the refinancing of our credit
    facility. Results for 2001 and 2000 have been restated to reflect the adoption of SFAS No. 145 “Rescission of FASB Statements
    No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections.” Gains and losses that were previously
    recorded as extraordinary items related to the early extinguishment of debt, which were a $7.3 million loss in 2001 and a
    $7.7 million gain in 2000, have been reclassified to interest expense. There was no effect on net income.
(6) In December 2001, in connection with our acquisition of the former Dean Foods Company (“Legacy Dean”), we purchased
    Dairy Farmers of America’s 33.8% interest in our Dairy Group.
(7) For purposes of calculating the ratio of earnings to combined fixed charges and preferred stock dividends, “earnings” represents
    income before income taxes plus fixed charges. “Fixed charges” consist of interest on all debt, amortization of deferred financing
    costs and the portion of rental expense that we believe is representative of the interest component of rent expense.
(8) Includes amounts outstanding under subsidiary lines of credit and the current portion of long-term debt.

                                                                    22




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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business Overview
    We are a leading food and beverage company. Our Dairy Group is the largest processor and distributor of milk and various other
dairy products in the United States. The Dairy Group manufactures and sells its products under a variety of local and regional brand
names and under customer private labels. Our WhiteWave Foods Company manufactures, markets and sells a variety of well known
soy, dairy and dairy-related nationally branded products including, for example: Silk® soymilk and cultured soy products; Horizon
Organic® dairy products, juices and other products; International Delight® coffee creamers; Marie’s® refrigerated dips and
dressings; and LAND O’ LAKES® fluid dairy and cultured products. Our Specialty Foods Group is the leading private label pickle
processor in the United States and a maker of a variety of other food products. In January 2005, we announced our intention to pursue
a tax-free spin-off of our Specialty Foods Group segment to our shareholders. See “— Developments Since January 1, 2004 — Tax
Free Spin-Off of Specialty Foods Group.” We also own the fourth largest dairy processor in Spain.
     Dairy Group — Our Dairy Group segment is our largest segment, with approximately 80% of our consolidated sales in 2004. Our
Dairy Group manufactures, markets and distributes a wide variety of branded and private label dairy case products, such as milk,
cream, ice cream, cultured dairy products and juices to retailers, distributors, foodservice outlets, schools and governmental entities
across the United States. The Dairy Group also manufactures a portion of the products marketed and sold by WhiteWave Foods
Company. Due to the perishable nature of the Dairy Group’s products, our Dairy Group delivers the majority of its products directly to
its customers’ stores in refrigerated trucks or trailers that we own or lease. This form of delivery is called a “direct store delivery” or
“DSD” system and we believe we have one of the most extensive refrigerated DSD systems in the United States. The Dairy Group
sells its products primarily on a local or regional basis through its local and regional sales forces, although some national customer
relationships are coordinated by the Dairy Group’s corporate sales department. Most of the Dairy Group’s customers, including its
largest customer, purchase products from the Dairy Group either by purchase order or pursuant to contracts that are generally
terminable at will by the customer. The Dairy Group’s sales are slightly seasonal, with sales tending to be higher in the third and
fourth quarters.
    The dairy industry is a mature industry that has traditionally been characterized by slow to flat growth, low profit margins,
fragmentation and excess capacity. Excess capacity resulted from the development of more efficient manufacturing techniques, the
establishment of captive dairy manufacturing operations by some grocery retailers and declining demand for fluid milk products.
Since 1990, the dairy industry has experienced significant consolidation led in part by us. Consolidation has tended to lower costs and
raise efficiency. However, consumption of traditional fluid dairy products has continued to decline. According to the United States
Department of Agriculture, per capita consumption of fluid milk and cream decreased by over 10% from 1990 to the end of 2003,
although total consumption has remained relatively flat over the same period due to population increases. Therefore, volume sales
growth across the industry generally remains flat to modest, profit margins generally remain low and excess manufacturing capacity
continues to exist. In this environment, price competition is particularly intense, as smaller processors struggle to retain enough
volume to cover their fixed costs. In response to this dynamic, in addition to the significant competitive pressure caused by the
ongoing consolidation among food retailers, many processors, including us, are now placing an increased emphasis on product
differentiation, and cost reduction in an effort to increase consumption, sales and margins.
    Our Dairy Group has several competitors in each of our major product and geographic markets. Competition between dairy
processors for shelf-space with retailers is based primarily on price, service and quality, while competition for consumer sales is based
on a variety of factors such as brand recognition, price, taste preference and quality. Dairy products also compete with many other
beverages and nutritional products for consumer sales.
    WhiteWave Foods Company — The WhiteWave Foods Company’s operations have historically been conducted through three
distinct operating units: White Wave, Inc. (“White Wave”), Horizon Organic and Dean National Brand Group. We are currently in the
process of consolidating these three operating units and

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Table of Contents

expect the consolidation to be completed in 2006. WhiteWave Foods Company manufactures, develops, markets and sells a variety of
nationally-branded soy, dairy and dairy-related products, such as Silk soymilk and cultured soy products; Horizon Organic dairy
products, juices and other products; International Delight coffee creamers; and LAND O’LAKES creamers and cultured products.
WhiteWave Foods Company also sells Sun Soy® soymilk; The Organic Cow of Vermont® organic dairy products; White Wave® and
Tofu Town® branded tofu; Hershey’s® milks and milkshakes; Marie’s dips and dressings; and Naturally Yours® sour cream. We
license the LAND O’LAKES and Hershey’s names from third parties.
    WhiteWave Foods Company sells its products to a variety of customers, including grocery stores, club stores, natural foods stores,
mass merchandisers, convenience stores and foodservice outlets. In 2004, approximately 84% of WhiteWave Foods Company’s sales
were to retailers and approximately 8% were to foodservice outlets. WhiteWave Foods Company’s customer base is diverse, with no
single customer representing more than 10% of sales in 2004. WhiteWave Foods Company sells its products through its internal sales
force and through independent brokers. The majority of WhiteWave Foods Company’s products are sold pursuant to customer
purchase order or pursuant to contracts that are generally terminable at will by the customer.
    WhiteWave Foods Company has several competitors in each of its product markets. Competition to obtain shelf-space with
retailers for a particular product is based primarily on the expected or historical sales performance of the product compared to its
competitors. Also, in some cases, WhiteWave Foods Company pays fees to retailers to obtain shelf-space for a particular product.
Competition for consumer sales is based on many different factors, including brand recognition, price, taste preferences and quality.
Consumer demand for soy and organic foods has grown rapidly in recent years due to growing consumer confidence in the health
benefits of soy and organic foods, and WhiteWave Foods Company has a leading position in the soy and organic foods category.
However, our soy and organic food products compete with many other beverages and nutritional products for consumer sales.
    Specialty Foods Group — Our Specialty Foods Group is the nation’s leading private label pickle processor, and one of the largest
manufacturers and sellers of non-dairy powdered creamer in the United States. The Specialty Foods Group also manufactures and sells
a variety of other foods, such as aseptic sauces and puddings. In January 2005 we announced our intention to pursue a tax-free spin-off
of our Specialty Foods Group segment. See “— Developments since January 1, 2004.”
   The Specialty Foods Group’s products are delivered to customers’ stores and warehouses primarily by common carrier. The
Specialty Foods Group sells its products through its internal sales force and through independent brokers. Most of the Specialty Foods
Group’s customers purchase products from the Specialty Foods Group either by purchase order or pursuant to contracts that are
generally terminable at will by the customer.
    The Specialty Foods Group has several competitors in each of its product markets. In sales of private label products, the principal
competitive factors are price relative to other private label suppliers, product quality and quality of service. For the Specialty Foods
Group’s branded products, competition to obtain shelf-space with retailers is based on the expected or historical sales performance of
the product compared to its competitors. In certain cases, the Specialty Foods Group pays fees to retailers to obtain shelf-space for a
particular company-branded product. Competition for consumer sales is based on brand recognition, price, taste preferences, and
quality.
    International Group — Our International Group, which does not qualify as a reportable segment, manufactures, markets and sells
private label and branded milk, butter and cream through its internal sales force to retailers and distributors across Spain and Portugal.
Also, effective January 1, 2005, our Rachel’s Organic Dairy business, which has historically been part of Horizon Organic’s
operations, was transferred to the International Group.

                                                                    24




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Table of Contents



Developments Since January 1, 2004
    Reorganization of WhiteWave Foods Company
    In the third quarter of 2004, we announced our intention to consolidate the three businesses included within our WhiteWave Foods
Company segment (formerly the Branded Products Group segment) into a single operating unit. We believe this consolidation will
allow us to interact with customers more efficiently and effectively as a single sales and marketing organization, and will enable us to
create a simplified and more efficient supply chain for our branded business. We have completed the consolidation of the sales,
marketing and research and development organization for the three companies, and in the third quarter of 2005, the employees of the
new company will move to a new headquarters located in Broomfield, Colorado. The full integration of these businesses will be a
lengthy process involving all aspects of the three companies’ operations, including purchasing, manufacturing, distribution and
administration, and will include the selection and implementation of a new information technology platform. As part of our overall
reorganization of WhiteWave Foods Company into a unified branded consumer packaged goods company, we also intend to bring
in-house certain manufacturing activities that are currently being done by third parties.
    In addition, effective March 11, 2005, Mr. Steve Demos, President of WhiteWave Foods Company resigned his position. We have
retained a leading executive recruiting firm to assist in the search for a new president. Mr. Gregg Engles, our Chairman of the Board
and Chief Executive Officer, has assumed direct leadership of WhiteWave Foods Company on an interim basis.

    Tax-Free Spin-Off of Specialty Foods Group
    On January 27, 2005, we announced our intent to pursue a tax-free spin-off of our Specialty Foods Group. The spin-off will create
a publicly traded food manufacturing company serving the retail grocery and foodservice markets with approximately 1,800
employees and estimated 2005 net sales of over $700 million. Also effective January 27, 2005, we hired a management team, headed
by Sam Reed, former CEO of Keebler Foods Company, to lead the new company. In conjunction with their employment, the
management team made a cash investment of $10 million in the Specialty Foods Group, representing 1.7% ownership of the new
business.
    As part of the spin-off, we intend to transfer our Mocha Mix® non-dairy creamer, Second Nature® egg substitute and foodservice
salad dressings businesses to the Specialty Foods Group from WhiteWave Foods Company and our Dairy Group.
   The spin-off is intended to take the form of a tax-free distribution to our shareholders of a new publicly traded stock, which we
expect to be listed on the New York Stock Exchange. We expect the spin-off to be completed in the third quarter of 2005, subject to
confirmation by the Internal Revenue Service of the tax-free nature of the transaction, registration of the new security with the
Securities and Exchange Commission and other customary closing conditions.

    Acquisitions
    Milk Products of Alabama
    On October 15, 2004, our Dairy Group acquired Milk Products of Alabama, a dairy manufacturer based in Decatur, Alabama.
Milk Products of Alabama had net sales of approximately $34 million in 2003. As a result of this acquisition, we have expanded our
production capabilities in the southeastern United States, allowing us to better serve our customers. Milk Products of Alabama’s
results of operations are now included in the Morningstar division of our Dairy Group. We paid approximately $23.2 million for the
purchase of Milk Products of Alabama, including costs of acquisition, and funded the purchase price with borrowings under our senior
credit facility.

    Tiger Foods
    On May 31, 2004, Leche Celta, our Spanish subsidiary, acquired Tiger Foods, a dairy processing business with one facility located
in Avila, Spain. Tiger Foods, which had net sales of approximately $29 million in

                                                                   25




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

2003, manufactures and distributes branded and private label UHT milk and dairy-based drinks throughout Spain, with an emphasis in
the southern and central regions. Tiger Foods’ operations complement our Spanish operations and we expect this acquisition to allow
us to reduce our transportation costs for raw milk and finished products due to the new facility’s geographic proximity to our raw milk
suppliers and certain customers. We paid approximately $21.9 million for the purchase of the company, all of which was funded with
borrowings under our senior credit facility.

    Soy Processing Facility
    On April 5, 2004, our WhiteWave Foods Company acquired a soy processing and packaging facility located in Bridgeton, New
Jersey. Prior to the acquisition, the previous owner of the facility co-packed Silk products for us at the facility. As a result of the
acquisition, we have increased our in-house processing and packaging capabilities for our soy products, resulting in cost reductions.
We paid approximately $25.7 million for the purchase of the facility, all of which was funded using borrowings under our senior
credit facility.

    LAND O’LAKES East
    In 2002, we purchased a perpetual license to use the LAND O’LAKES brand on certain dairy products nationally, excluding cheese
and butter. This perpetual license was subject, however, to a pre-existing sublicense entitling a competitor to manufacture and sell
cream, sour cream and whipping cream in certain channels in the eastern United States. Effective March 31, 2004, we acquired that
sublicense and certain customer relationships of the sublicensee (“LAND O’LAKES East”) for an aggregate purchase price of
approximately $17 million, all of which was funded using borrowings under our senior credit facility. We now have the exclusive
right to use the LAND O’LAKES brand on certain dairy products (other than cheese and butter) throughout the entire United States.

    Ross Swiss Dairies
    On January 26, 2004, our Dairy Group acquired Ross Swiss Dairies, a dairy distributor based in Los Angeles, California, which
had net sales of approximately $120 million in 2003. As a result of this acquisition, we have increased the distribution capability of
our Dairy Group in southern California, allowing us to better serve our customers. Ross Swiss Dairies has historically purchased a
significant portion of its products from other processors. Now the majority of products distributed by Ross Swiss Dairies are
manufactured in our southern California facilities. We paid approximately $21.8 million, including transaction costs, for the purchase
of Ross Swiss Dairies and funded the purchase price with borrowings under our receivables-backed facility.

    Horizon Organic
    On January 2, 2004, we completed the acquisition of the 87% of Horizon Organic Holding Corporation (“Horizon Organic”) that
we did not already own. Horizon Organic had sales of over $200 million during 2003. We already owned approximately 13% of the
outstanding common stock of Horizon Organic as a result of investments made in 1998. Third-party co-packers, including us, have
historically done all of Horizon Organic’s manufacturing. During 2003, we produced approximately 27% of Horizon Organic’s fluid
dairy products. We also distributed Horizon Organic’s products in several parts of the country. Horizon Organic is a leading branded
organic foods company in the United States. Because organic foods are gaining popularity with consumers and because Horizon
Organic’s products offer consumers an alternative to our Dairy Group’s traditional dairy products, we believe Horizon Organic is an
important addition to our portfolio of brands. The aggregate purchase price for the 87% of Horizon Organic that we did not already
own was approximately $287 million, including approximately $217 million of cash paid to Horizon Organic’s stockholders, the
repayment of approximately $40 million of borrowings under Horizon Organic’s former credit facility, and transaction expenses of
approximately $9 million, all of which was funded using borrowings under our senior credit facility and our receivables-backed
facility. In addition, each of the options to purchase Horizon Organic’s common stock outstanding on January 2, 2004 was converted
into an option to purchase

                                                                   26




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Table of Contents

.7301 shares of our stock, with an aggregate fair value of approximately $21 million. Beginning with the first quarter of 2004, Horizon
Organic’s financial results are reported in our WhiteWave Foods Company segment.
   See Note 2 to our Consolidated Financial Statements for more information about our acquisitions.

    Facility Closing and Reorganization Activities
   As part of our continued reorganization and cost reduction efforts in our Dairy Group, we closed eight Dairy Group facilities in
2004. The closed facilities were located in Lansing, Michigan; Wilkesboro, North Carolina; Madison, Wisconsin; Sulphur Springs,
Texas; San Leandro and South Gate, California; Westwego, Louisiana and Pocatello, Idaho.
    On September 7, 2004, we announced our plan to exit the nutritional beverages business operated by our Specialty Foods Group
segment, including the closure of a manufacturing facility in Benton Harbor, Michigan. In 2004, we experienced significant declines
in volume on this product line and we believed those volumes could not be replaced without a significant investment in capital and
research and development. We ceased nutritional beverages production in December 2004.
    We recorded a total of approximately $34.7 million in facility closing and reorganization costs during 2004. We expect to incur
additional charges related to these restructuring plans of approximately $7.1 million, primarily in 2005. These charges include the
following costs:
    • Workforce reductions as a result of facility closings, facility reorganizations and consolidation of administrative functions;
    • Shutdown costs, including those costs necessary to prepare abandoned facilities for closure;
    • Costs incurred after shutdown such as lease obligations or termination costs, utilities and property taxes;
    • Costs associated with the reorganization of WhiteWave Foods Company’s supply chain and distribution activities, including
      termination of certain contractual agreements; and
    • Write-downs of property, plant and equipment and other assets, primarily for asset impairments as a result of facilities that are no
      longer used in operations. The impairments relate primarily to owned buildings, land and equipment at the facilities, which are
      written down to their estimated fair value and held for sale.
    See Note 15 to our Consolidated Financial Statements for more information regarding our facility closing and reorganization
activities.

    Construction of New Facilities
    During 2004, our Dairy Group completed construction of a new dairy manufacturing and distribution facility in Las Vegas,
Nevada. This facility commenced operations in the third quarter of 2004 and allows us to better serve the southern Nevada, Arizona
and southern Colorado markets. In addition, Leche Celta finished construction of our first dairy manufacturing facility in Portugal in
the fourth quarter of 2004. The new facility is located in Alpiarca, Portugal and commenced production in December 2004. The new
facility allows us to expand our Iberian operations.

    Stock Buyback
   During 2004, we spent approximately $297 million, including commissions and fees, to repurchase 9.3 million shares of our
common stock for an average purchase price of $31.90 per share. At March 11, 2005, approximately $118 million remained available
under our current authorization. See Note 11 to our Consolidated Financial Statements.

                                                                    27




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    Amendment to Credit Facility
    In August 2004, we amended our senior credit facility to (1) increase the size of our revolving credit facility from $1 billion to
$1.5 billion, (2) increase the size of our term loan A from $850 million to $1.5 billion, (3) eliminate term loans B and C and
(4) modify the interest rate and payment terms. When we amended our credit facility, we were required to write-off approximately
$32.6 million of deferred financing costs that were incurred in connection with our credit facility prior to the amendment. These costs
were being amortized over the previous terms of the revolving credit facility and term loans. See Note 9 to our Consolidated Financial
Statements.

Results of Operations
    The following table presents certain information concerning our financial results, including information presented as a percentage
of net sales.
                                                                              Year Ended December 31
                                                    2004                                 2003                                      2002
                                          Dollars              Percent         Dollars            Percent                Dollars          Percent
                                                                                (Dollars in millions)
Net sales                             $   10,822.3               100.0%       $   9,184.6              100.0%       $     8,991.5            100.0%
Cost of sales                              8,257.8                76.3            6,808.2               74.1              6,642.8             73.9
Gross profit                               2,564.5                23.7            2,376.4               25.9              2,348.7             26.1
Operating costs and expenses:
    Selling and distribution                1,512.5                14.0           1,345.1               14.6              1,321.8             14.7
    General and administrative                349.7                 3.2             317.3                3.5                337.5              3.7
    Amortization of intangibles                 6.6                 0.1               4.9                0.1                  7.8              0.1
    Facility closing and
      reorganization costs                     34.7                 0.3                11.8               0.1                 19.0             0.2
    Other operating income                     (5.9)               (0.1)              (68.7)             (0.7)                 —               —
          Total operating costs and
            expenses                        1,897.6                17.5           1,610.4               17.6              1,686.1             18.7
Total operating income                $       666.9                 6.2%      $     766.0                8.3%       $       662.6              7.4%


    Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 — Consolidated Results
    Net Sales — Consolidated net sales increased approximately 17.8% to $10.82 billion during 2004 from $9.18 billion in 2003. Net
sales by segment are shown in the table below.
                                                                                                 Net Sales
                                                                                                           $ Increase/               % Increase/
                                                               2004                   2003                 (Decrease)                (Decrease)
                                                                                          (Dollars in millions)
Dairy Group                                                $    8,646.4           $    7,542.1          $        1,104.3                   14.6%
WhiteWave Foods Company                                         1,188.4                  713.4                     475.0                   66.6
Specialty Foods Group                                             676.8                  684.2                      (7.4)                  (1.1)
Corporate/ Other                                                  310.7                  244.9                      65.8                   26.9
   Total                                                   $   10,822.3           $    9,184.6          $        1,637.7                   17.8%

                                                                         28




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents


   The change in net sales was due to the following:
                                                                          Change in Net Sales 2004 vs. 2003
                                                                                                         Pricing,
                                                                                                                             Total
                                                                                                         Volume
                                                                                    Foreign            and Product          Increase/
                                        Acquisitions         Divestitures          Exchange           Mix Changes          (Decrease)
                                                                                    (In millions)
Dairy Group                             $     386.2         $      (26.2)          $     —         $        744.3      $       1,104.3
WhiteWave Foods Company                       282.8                 (4.0)                —                  196.2                475.0
Specialty Foods Group                           6.7                   —                  —                  (14.1)                (7.4)
Corporate/ Other                               18.0                  —                 28.1                  19.7                 65.8
Total                                   $     693.7         $      (30.2)          $   28.1        $        946.1      $       1,637.7


    Net sales increased approximately $1.64 billion during 2004 compared to the prior year primarily due to higher selling prices
resulting from the pass-through of increased raw milk costs and due to acquisitions. We acquired Kohler Mix Specialties, Melody
Farms and Ross Swiss Dairies in our Dairy Group segment; Horizon Organic and LAND O’LAKES East in our WhiteWave Foods
Company segment; Cremora® in our Specialty Foods Group segment; and Tiger Foods in our Corporate/ Other segment.
    Cost of Sales — All expenses incurred to bring a product to completion are included in cost of sales, such as raw material,
ingredient and packaging costs; labor costs; plant and equipment costs, including costs to operate and maintain our coolers and
freezers; and costs associated with transporting our finished products from our manufacturing facilities to our own distribution
facilities. Our cost of sales ratio increased to 76.3% in 2004 compared to 74.1% in 2003 due almost entirely to increased raw material
costs that affected all of our segments in 2004.
    Operating Costs and Expenses — Our operating expenses increased approximately $287.2 million, or approximately 17.8%,
during 2004 versus the prior year. Operating expenses increased primarily due to the following:
    • Acquisitions, which we estimate represented approximately $118 million of the increase.
    • A $62.8 million decline in other operating income compared to last year primarily due to a $66.2 million gain on the sale of our
      frozen pre-whipped topping business that reduced operating expenses in 2003.
    • Higher fuel costs across all segments and increased volumes at the WhiteWave Foods Company, which we estimate added a
      combined total of approximately $29 million to distribution costs for 2004 as compared to last year.
    • Net facility closing and reorganization costs that were approximately $22.9 million higher than 2003.
    • Corporate expenses that were approximately $10 million higher than last year, including higher professional fees and legal fees
      primarily related to the reorganization of our WhiteWave Foods Company, increased transactional activity and higher regulatory
      compliance fees.
Our operating expense ratio was consistent at 17.5% for 2004 as compared to 17.6% for 2003.
    Operating Income — Operating income during 2004 was $666.9 million, a decrease of $99.1 million from 2003 operating income
of $766 million. This decrease was primarily due to the $66.2 million gain on the sale of our frozen pre-whipped topping business in
2003. Our operating margin in 2004 was 6.2% compared to 8.3% in 2003. Our operating margin decreased primarily as a result of
higher raw material costs and the effect of increased sales.
    Other (Income) Expense — Total other (income) expense increased by $12.1 million in 2004 compared to 2003. Interest expense
increased to $204.8 million in 2004 from $181.1 million in 2003, primarily due to a charge of $32.6 million in 2004 to write-off
deferred financing costs related to our senior credit facility amended in August 2004. This charge was partially offset by lower interest
expense due to lower interest rates

                                                                    29




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Table of Contents

during 2004. There were no financing charges on preferred securities in 2004 as compared to $14.2 million in 2003. Our convertible
preferred securities were converted into common stock in the second quarter of 2003. See Note 10 to our Consolidated Financial
Statements.
    Income Taxes — Income tax expense was recorded at an effective rate of 38.3% in 2004 compared to 38.0% in 2003. Our
effective tax rate varies based on the relative earnings of our business units.

    Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 — Results by Segment
   As noted above, we had three reportable segments in 2004: the Dairy Group, WhiteWave Foods Company and the Specialty Foods
Group.
   The key performance indicators of our segments are sales volumes, gross profit and operating income.
   Dairy Group —
                                                                                             Year Ended December 31
                                                                                     2004                                       2003
                                                                      Dollars               Percent                Dollars              Percent
                                                                                                (Dollars in millions)
Net sales                                                         $        8,646.4             100.0%           $   7,542.1                100.0%
Cost of sales                                                              6,655.3              77.0                5,619.4                 74.5
Gross profit                                                               1,991.1              23.0                1,922.7                 25.5
Operating costs and expenses                                               1,396.6              16.1                1,281.7                 17.0
Total operating income                                            $          594.5               6.9%           $     641.0                  8.5%


   The Dairy Group’s net sales increased by approximately $1.10 billion, or 14.6%, in 2004 versus 2003. The change in net sales
from 2003 to 2004 was due to the following:
                                                                                                           Dollars                     Percent
                                                                                                                 (Dollars in millions)
2003 Net sales                                                                                         $      7,542.1
   Acquisitions                                                                                                 386.2                       5.1%
   Divestitures                                                                                                 (26.2)                     (0.4)
   Volume                                                                                                         6.3                       0.1
   Pricing and product mix                                                                                      738.0                       9.8
2004 Net sales                                                                                         $      8,646.4                      14.6%


    The increase in the Dairy Group’s net sales due to pricing and product mix shown in the above table primarily results from
increased pricing due to the pass through of higher raw milk costs in 2004. In general, our Dairy Group changes the prices it charges
customers for fluid dairy products on a monthly basis, as the costs of raw materials fluctuate. Because of competitive pressures, the
price increases do not reflect the entire increase in raw material costs that we experienced. The following table sets forth the average
monthly Class I “mover” and average monthly Class II minimum prices for raw skim milk and butterfat for 2004 compared to 2003:
                                                                                                           Year Ended December 31*
                                                                                                                                           %
                                                                                                    2004                 2003
                                                                                                                                         Change
Class I raw skim milk mover(1)                                                                  $     8.44(2)        $    7.47(2)                13%
Class I butterfat mover(1)                                                                            1.95(3)             1.19(3)                64
Class II raw skim milk minimum(4)                                                                     6.90(2)             6.74(2)                 2
Class II butterfat minimum(4)                                                                         2.06(3)             1.22(3)                69

                                                                      30




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents


 *      The prices noted in this table are not the prices that we actually pay. The minimum prices applicable at any given location for
        Class I raw skim milk or Class I butterfat are based on the Class I mover plus a location differential. Class II prices noted in the
        table are federal minimum prices, applicable at all locations. Our actual cost also includes producer premiums, procurement
        costs and other related charges that vary by location and vendor. Please see “Part I — Item 1. Business — Government
        Regulation — Milk Industry Regulation” and “— Known Trends and Uncertainties — Prices of Raw Milk, Cream and Other
        Inputs” for a more complete description of raw milk pricing.
(1)    We process Class I raw skim milk and butterfat into fluid milk products.
(2)    Prices are per hundredweight.
(3)    Prices are per pound.
(4)    We process Class II raw skim milk and butterfat into products such as cottage cheese, creams and creamers, ice cream and sour
       cream.
    The other primary cause of the increase in the Dairy Group’s net sales was acquisitions. The Dairy Group acquired Milk Products
of Alabama in October 2004, Ross Swiss Dairies in January 2004, Kohler Mix Specialties in October 2003 and Melody Farms in June
2003, which we estimate contributed a combined total of $386.2 million in sales during 2004. These increases in sales were slightly
offset by the divestiture in July 2003 of the frozen pre-whipped topping and frozen creamer operations.
   Volume change for all Dairy Group products, excluding the impact of acquisitions and divestitures, was an increase of 0.1% in
2004 compared to 2003. Volume sales of milk and cream, which were approximately 76% of the Dairy Group’s 2004 sales, were up
approximately 0.9% for the year compared to USDA data showing a 0.8% decline in total consumption of milk and cream in the
U.S. during the year.
    The Dairy Group’s cost of sales ratio was substantially higher in 2004 at 77% compared to 74.5% for 2003 primarily due to the
increase in raw milk costs compared to the prior year. The average minimum price of Class I raw skim milk (as indicated by the
Class I mover, described above) was 13% higher and the average Class I butterfat mover increased 64% in 2004 as compared to 2003.
Our costs were also impacted by resin prices as they continued to rise to unprecedented levels. Higher resin prices impacted the costs
of plastic bottles used in our production process by approximately $17 million. Due to a very competitive retail environment in 2004,
we were unable to pass along the entire increase in raw material costs to our customers.
    The Dairy Group’s operating expenses increased approximately $114.9 million during 2004 compared to 2003 primarily due to
(1) acquisitions, which we estimate contributed approximately $61 million in operating costs; (2) higher fuel costs of which
approximately $14 million was related to an increase in fuel prices and (3) an increase in insurance expense due to our claims
experience. The increase in sales volumes also contributed to our higher operating expenses. These increases were partly offset by a
decrease in bad debt expense, primarily due to more favorable than expected resolution of previously accrued bad debt reserves. These
bad debt reserves were recorded for certain customers that had experienced economic difficulty and a few large customers that sought
bankruptcy protection over the past several years. The Dairy Group’s operating expense ratio decreased to 16.1% in 2004 from 17.0%
in 2003 due to the effect of increased sales.
      WhiteWave Foods Company —
                                                                                             Year Ended December 31
                                                                                      2004                                   2003
                                                                          Dollars            Percent               Dollars          Percent
                                                                                                (Dollars in millions)
Net sales                                                             $     1,188.4             100.0%         $     713.4             100.0%
Cost of sales                                                                 792.0              66.6                468.4              65.7
Gross profit                                                                  396.4              33.4                245.0              34.3
Operating costs and expenses                                                  278.0              23.4                211.4              29.6
Total operating income                                                $       118.4              10.0%         $      33.6               4.7%

                                                                     31




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Table of Contents


   WhiteWave Foods Company’s net sales increased by $475 million, or 66.6%, in 2004 versus 2003. The change in net sales from
2003 to 2004 was due to the following:
                                                                                                    Dollars                     Percent
                                                                                                          (Dollars in millions)
2003 Net sales                                                                                  $        713.4
   Acquisitions                                                                                          282.8                      39.6%
   Divestitures                                                                                           (4.0)                     (0.5)
   Volume                                                                                                 94.3                      13.2
   Pricing and product mix                                                                               101.9                      14.3
2004 Net sales                                                                                  $      1,188.4                      66.6%


   The most significant cause of the increase in WhiteWave Foods Company’s sales was the acquisition of Horizon Organic effective
January 1, 2004, and to a lesser extent the acquisition of LAND O’LAKES East effective March 31, 2004.
    Higher pricing also contributed to the increase in sales. The two primary drivers of this increase were (1) increased selling prices
in response to increased commodity costs and (2) a decline in slotting fees, couponing and certain other promotional costs that are
required to be recorded as reductions of net sales, as we shift our focus toward consumer-oriented advertising and marketing, which is
recorded as operating expense.
    Another significant cause of the increase in sales was increased volumes. Volume sales for the WhiteWave Foods Company,
excluding the impact of acquisitions and divestitures, increased approximately 13.2% in 2004 due to the success of our brands,
particularly Silk and International Delight. Silk volumes increased 25% and International Delight volumes increased 22% compared
to 2003. We believe increased Silk volumes were due primarily to: (1) increased consumer acceptance of soy products, resulting in
increased penetration of soymilk in the club, mass merchandiser and grocery channels; (2) the positive effects of our consumer
advertising; and (3) the introduction of new Silk products with nutritional enhancements, new flavors and larger size offerings. We
believe the increase in International Delight volumes is due primarily to consumer acceptance of new packaging introduced in 2003
and new low-carb flavors introduced in 2004.
   These increases were offset slightly by the divestiture in July 2003 of the branded frozen pre-whipped topping and frozen creamer
operations.
    The cost of sales ratio for the WhiteWave Foods Company increased to 66.6% in 2004 from 65.7% in 2003 primarily due to the
impact of higher raw material costs, particularly Class II butterfat and organic soybeans, and the addition of Horizon Organic, which
has a higher cost of sales ratio. The average minimum price of Class II butterfat was 69% higher in 2004 than in 2003. Our average
cost of organic soybeans was approximately 40% higher in 2004 than in 2003 primarily due to an increase in domestic organic
soybean prices and the utilization of foreign grown organic soybeans, which have a higher price than domestic beans.
   Operating expenses increased approximately $66.6 million in 2004 compared to the prior year primarily due to acquisitions, which
we estimate contributed approximately $56 million in costs, and increased volumes and higher fuel costs which together contributed
approximately $11.5 million to distribution expenses. Marketing spending increased approximately 6% in 2004 as compared to 2003.
These increases were somewhat offset by a decline of approximately $16.1 million related to the expiration of the White Wave
management incentive plan in March 2004. The operating expense ratio decreased to 23.4% during 2004 from 29.6% during the prior
year primarily due to the relatively smaller increase in operating expense dollars compared to the increase in sales dollars.

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   Specialty Foods Group —
                                                                                           Year Ended December 31
                                                                                   2004                                    2003
                                                                        Dollars           Percent               Dollars            Percent
                                                                                              (Dollars in millions)
Net sales                                                           $      676.8             100.0%         $      684.2              100.0%
Cost of sales                                                              536.7              79.3                 514.9               75.3
Gross profit                                                               140.1              20.7                 169.3               24.7
Operating costs and expenses                                                71.7              10.6                  68.0                9.9
Total operating income                                              $       68.4              10.1%         $      101.3               14.8%


   The Specialty Foods Group’s net sales decreased by $7.4 million, or 1.1%, in 2004 versus 2003. The change in net sales from
2003 to 2004 was due to the following:
                                                                                                      Dollars                Percentage
                                                                                                           (Dollars in millions)
2003 Net sales                                                                                    $       684.2
   Acquisitions                                                                                             6.7                     1.0%
   Volume                                                                                                 (13.3)                   (2.0)
   Pricing and product mix                                                                                 (0.8)                   (0.1)
2004 Net sales                                                                                    $       676.8                    (1.1)%


    The net decrease in sales was due primarily to an overall decline in volumes in the nutritional beverages and pickle categories.
Pickle volumes declined 2% largely due to a decline in sales attributable to the bankruptcy of a large customer in 2003 and the loss of
a large retail chain customer in 2004. Private label nutritional beverages sales, which include drinks in the weight loss/gain, meal
supplement and sports categories, declined approximately $17 million, or 44%. In the fourth quarter of 2004, we exited the
manufacturing of nutritional beverage products as a result of these significant volume declines during the year because we believed
those volumes could not be replaced without a significant investment in capital and research and development.
    These decreases in sales were partly offset by an increase in non-dairy powdered creamer sales due to increased sales to existing
customers and higher pricing. Sales also increased slightly due to the acquisition of Cremora in December 2003.
   The Specialty Foods Group’s cost of sales ratio increased to 79.3% in 2004 from 75.3% in 2003, primarily due to substantially
higher commodity costs, particularly casein, soybean oil and cheese which increased by a combined total of approximately
$19 million, as well as significant increases in glass and other packaging costs which increased approximately $3 million.
    Operating expenses for the Specialty Foods Group increased approximately $3.7 million primarily related to increased distribution
expenses as a result of higher fuel costs. The Specialty Foods Group’s operating expense ratio increased to 10.6% in 2004 compared
to 9.9% during the prior year.

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    Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 — Consolidated Results
    Net Sales — Consolidated net sales increased approximately 2% to $9.18 billion during 2003 from $8.99 billion in 2002. Net sales
by segment are shown in the table below.
                                                                                                   Net Sales
                                                                                                             $ Increase/      % Increase/
                                                                2003                     2002                (Decrease)       (Decrease)
                                                                                             (Dollars in millions)
Dairy Group                                                 $       7,542.1         $    7,601.0          $        (58.9)            (0.8)%
WhiteWave Foods Company                                               713.4                517.3                   196.1             37.9
Specialty Foods Group                                                 684.2                673.6                    10.6              1.6
Corporate/ Other                                                      244.9                199.6                    45.3             22.7
   Total                                                    $       9,184.6         $    8,991.5          $        193.1              2.1%


   The change in net sales was due to the following:
                                                                              Change in Net Sales 2003 vs. 2002
                                                                                                                 Pricing,
                                                                                                                                    Total
                                                                                                                 Volume
                                                                                           Foreign             and Product       Increase/
                                          Acquisitions          Divestitures              Exchange             Mix Changes      (Decrease)
                                                                                        (In millions)
Dairy Group                               $     127.3           $      (110.7)            $    —           $         (75.5)     $     (58.9)
WhiteWave Foods Company                          68.8                    (3.8)                 —                     131.1            196.1
Specialty Foods Group                              —                    (13.7)                 —                      24.3             10.6
Corporate/ Other                                   —                       —                  40.3                     5.0             45.3
   Total                                  $     196.1           $      (128.2)            $   40.3         $          84.9      $     193.1


    Cost of Sales — All expenses incurred to bring a product to completion are included in cost of sales, such as raw material,
ingredient and packaging costs; labor costs; plant and equipment costs, including costs to operate and maintain our coolers and
freezers; and costs associated with transporting our finished products from our manufacturing facilities to our own distribution
facilities. Our cost of sales ratio was 74.1% in 2003 compared to 73.9% in 2002. Increased raw material costs affected all of our
segments in 2003. Also, the WhiteWave Foods Company segment incurred higher costs due to certain manufacturing inefficiencies
related to the introduction of new products and new technologies, and the realignment of certain manufacturing operations.
    Operating Costs and Expenses — Operating expenses decreased approximately $75.7 million, or 4.5%, in 2003 compared to the
prior year. This decrease was mostly due to (1) a gain of $66.2 million on the sale of frozen pre-whipped topping and frozen creamer
operations in the third quarter of 2003, (2) a gain of $2.5 million related to the divestiture of 11 facilities in 2001, which was recorded
at corporate as a result of certain contingencies being favorably resolved during 2003, and (3) lower facility closing and other
reorganization costs of $11.8 million in 2003 compared to $19.1 million in 2002, primarily due to differences in the nature of the
restructuring activities and to the timing of recognition of certain charges as a result of our adoption of SFAS No. 146, “Accounting
for Costs Associated with Exit or Disposal Activities,” in January 2003.
   Our operating expense ratio decreased to 17.6% in 2003 as compared to 18.7% in 2002.
    Operating Income — Operating income during 2003 was $766 million, an increase of $103.4 million, from 2002 operating income
of $662.6 million. Our operating margin in 2003 was 8.3% compared to 7.4% in 2002. The operating margin increase was the result of
the decline in the operating expense ratio primarily due to the other operating income reported in 2003.
   Other (Income) Expense — Total other (income) expense decreased by $49.4 million in 2003 compared to 2002. Interest expense
decreased to $181.1 million in 2003 from $197.7 million in 2002. This decrease was

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Table of Contents

the result of lower interest rates and lower average debt balances in 2003. Financing charges on preferred securities were $14.2 million
in 2003 versus $33.6 million in 2002 due to the conversion of these securities to common stock during the second quarter of 2003. See
Note 10 to our Consolidated Financial Statements.
    Income from investments in unconsolidated affiliates was $244,000 in 2003 compared to a loss of $7.9 million in 2002. Income in
2003 was related to our approximately 13% interest in Horizon Organic Holding Corporation. In 2002, we recorded income of
$2.1 million, which was primarily related to our 36% interest in White Wave through May 9, 2002, when we acquired the remaining
equity interest in White Wave and began consolidating White Wave’s results with our financial results. This income was offset in
2002 by a $10 million loss on our minority interest in Consolidated Container Company. See Note 3 to our Consolidated Financial
Statements.
    Income Taxes — Income tax expense was recorded at an effective rate of 38.0% in 2003 compared to 36.4% in 2002. In 2002 we
recorded the favorable settlement of a contested tax issue. Our tax rate varies as the mix of earnings contributed by our various
business units changes.

    Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 — Results by Segment
   As noted above, we had three reportable segments in 2004: the Dairy Group, the WhiteWave Foods Company and the Specialty
Foods Group. Prior periods have been restated to reflect the new segment reporting structure.
   The key performance indicators of our segments are sales volumes, gross profit and operating income.
   Dairy Group —
                                                                                         Year Ended December 31
                                                                                 2003                                     2002
                                                                     Dollars            Percent                Dollars             Percent
                                                                                            (Dollars in millions)
Net sales                                                        $     7,542.1             100.0%         $     7,601.0               100.0%
Cost of sales                                                          5,619.4              74.5                5,670.2                74.6
Gross profit                                                           1,922.7              25.5                1,930.8                25.4
Operating costs and expenses                                           1,281.7              17.0                1,338.3                17.6
Total operating income                                           $       641.0               8.5%         $       592.5                 7.8%


   The Dairy Group’s net sales decreased approximately $58.9 million, or 0.8%, in 2003 versus 2002. The change in net sales from
2002 to 2003 was due to the following:
                                                                                                       Dollars                    Percent
                                                                                                            (Dollars in millions)
2002 Net sales                                                                                    $       7,601.0
   Acquisitions                                                                                             127.3                      1.7%
   Divestitures                                                                                            (110.7)                    (1.5)
   Volume                                                                                                  (159.6)                    (2.1)
   Pricing and product mix                                                                                   84.1                      1.1
2003 Net sales                                                                                    $       7,542.1                     (0.8)%


   The Dairy Group acquired Kohler Mix Specialties in October 2003 and Melody Farms in June 2003.
    The Dairy Group’s sales declined primarily due to lower sales volumes. Volume change for all products, excluding the effect of
acquisitions and divestitures, was a decline of 2.1% in 2003 compared to 2002. That volume change was driven primarily by the fluid
dairy and ice cream categories. Equivalent gallons of fluid dairy products sold (including milk and cream) decreased by approximately
1.1% in 2003. We believe the decrease was due primarily to continued declining consumption of traditional fluid dairy products in
some

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Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

parts of the country. Ice cream and ice cream novelty volumes declined by approximately 7% in 2003 compared to 2002, primarily
because we sell our ice cream under private labels and local brands, and we believe we lost sales during the year to nationally branded
products which were promoted more aggressively than our products. In addition, certain private label products historically sold by the
Dairy Group, including sour cream, whipping cream and coffee creamers, were converted to sales of LAND O’ LAKES products,
which are reported in our WhiteWave Foods Company segment.
    Net sales also declined by approximately $110.7 million related to divestitures. We sold our frozen pre-whipped topping and
frozen creamer operations in July 2003. In addition, beginning in January 2002, we began exiting from the Lactaid®, Nestlé®
Nesquik® and Nestlé® Coffeemate® co-packing businesses due to the termination of the co-packing agreements. Our transition out of
the Lactaid co-packing business was completed in February 2002 and our transition out of the Nestle co-packing business was
completed in February 2003.
    These decreases were partly offset by an increase in pricing. The increase in sales due to pricing and product mix shown in the
above table primarily results from higher raw milk costs in 2003 than in 2002, offset somewhat by price concessions that were granted
in some markets due to competitive pressures. In general, our Dairy Group changes the prices it charges customers for fluid dairy
products on a monthly basis, as the costs of raw materials fluctuate. The following table sets forth the average monthly Class I
“mover” and average monthly Class II minimum prices for raw skim milk and butterfat for 2003 compared to 2002:
                                                                                                      Year Ended December 31*
                                                                                                                                  %
                                                                                               2003              2002
                                                                                                                                Change
Class I raw skim milk mover(1)                                                             $     7.47(2)     $    7.01(2)            7%
Class I butterfat mover(1)                                                                       1.19(3)          1.21(3)           (2)
Class II raw skim milk minimum(4)                                                                6.74(2)          7.62(2)          (12)
Class II butterfat minimum(4)                                                                    1.22(3)          1.20(3)            2


 *      The prices noted in this table are not the prices that we actually pay. The federal order minimum prices at any given location for
        Class I raw skim milk or Class I butterfat are based on the Class I mover prices plus a location differential. Class II prices noted
        in the table are federal minimum prices, applicable at all locations. Our actual cost also includes producer premiums,
        procurement costs and other related charges that vary by location and vendor. Please see “Part I — Item 1. Business —
        Government Regulation — Milk Industry Regulation,” and “— Known Trends and Uncertainties — Prices of Raw Milk,
        Cream and Other Inputs” for a more complete description of raw milk pricing.
(1)    We process Class I raw skim milk and butterfat into fluid milk products.
(2)    Prices are per hundredweight.
(3)    Prices are per pound.
(4)    We process Class II raw skim milk and butterfat into products such as cottage cheese, creams and creamers, ice cream and sour
       cream.
      The Dairy Group’s cost of sales ratio remained consistent at 74.5% in 2003 compared to 74.6% in 2002.
    The Dairy Group’s operating expenses decreased approximately $56.6 million to $1.28 billion in 2003 from $1.34 billion in 2002.
The decrease in the Dairy Group’s operating expenses was primarily due to lower insurance, advertising, bad debt and bonus expenses
in 2003. Insurance costs (including the costs of self-insurance) declined in 2003 as a result of better claims experience. Advertising
expenses decreased in 2003 partially because we reduced planned advertising spending in 2003 in anticipation of the difficult raw
milk environment and also because advertising expense in 2002 was higher than normal as we incurred unusual advertising costs in
order to (1) promote our brands in certain parts of the country following our acquisition of Legacy Dean, and (2) promote two local
Dairy Group brands affected by product recalls in 2002. Bad debt expense declined in 2003 compared to 2002. In 2002, some of our
customers experienced economic difficulty and a few large customers sought bankruptcy protection. Bonus expenses were lower in
2003 than in 2002 as a result of our actual performance compared to bonus targets.

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   WhiteWave Foods Company —
                                                                                           Year Ended December 31
                                                                                  2003                                    2002
                                                                       Dollars           Percent               Dollars             Percent
                                                                                             (Dollars in millions)
Net sales                                                          $      713.4             100.0%          $     517.3                100.0%
Cost of sales                                                             468.4              65.7                 299.6                 57.9
Gross profit                                                              245.0              34.3                 217.7                 42.1
Operating costs and expenses                                              211.4              29.6                 158.5                 30.7
Total operating income                                             $       33.6               4.7%          $      59.2                 11.4%


   WhiteWave Foods Company’s net sales increased by $196.1 million, or 37.9%, in 2003 compared to 2002. The change in net sales
from 2002 to 2003 was due to the following:
                                                                                                       Dollars                     Percent
                                                                                                             (Dollars in millions)
2002 Net sales                                                                                     $        517.3
   Acquisitions                                                                                              68.8                      13.3%
   Divestitures                                                                                              (3.8)                     (0.7)
   Volume                                                                                                   106.2                      20.5
   Pricing and product mix                                                                                   24.9                       4.8
2003 Net sales                                                                                     $        713.4                      37.9%


  We acquired the 64% of White Wave that we did not already own in May 2002. Therefore, 2003 includes 12 months of White
Wave sales compared to only 8 months in 2002.
   Unit volumes for WhiteWave Foods Company, excluding the effect of acquisitions and divestitures, increased 20.5% overall in
2003 due to the success of our nationally branded products, particularly Silk.
    Sales increased due to pricing, product mix and other changes, including price increases for several of our products, such as
Hershey’s, Maries and LAND O’LAKES. These price increases were partly offset by price reductions for International Delight in order
to clear shelf space for new plastic packaging that was introduced in the first half of 2003.
    The cost of sales ratio for WhiteWave Foods Company increased to 65.7% in 2003 compared to 57.9% in 2002 primarily due to
the impact of (1) short-term manufacturing inefficiencies related to the introduction of new products and new technologies,
(2) short-term manufacturing inefficiencies due to certain manufacturing realignments related to the shifting of certain manufacturing
operations to our Dairy Group Segment, and (3) an additional $15 million of packaging costs due to the introduction of International
Delight in plastic packaging.
   Operating expenses were $211.4 million during 2003 compared to $158.5 million during 2002. This increase was primarily due to
higher marketing expenses in 2003 related to the introduction of new products and higher promotional spending on nationally branded
products. Operating expenses were also significantly impacted by the addition of White Wave in May 2002, including the accrual of
almost $10 million more in 2003 than in 2002 for bonuses paid in March 2004 under the White Wave Performance Bonus Plan that
was established when we acquired White Wave.

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   Specialty Foods Group —
                                                                                            Year Ended December 31
                                                                                   2003                                     2002
                                                                        Dollars           Percent               Dollars             Percent
                                                                                              (Dollars in millions)
Net sales                                                           $      684.2             100.0%          $      673.6              100.0%
Cost of sales                                                              514.9              75.3                  498.1               73.9
Gross profit                                                               169.3              24.7                  175.5               26.1
Operating costs and expenses                                                68.0               9.9                   76.6               11.4
Total operating income                                              $      101.3              14.8%          $       98.9               14.7%


   The Specialty Foods Group’s net sales increased by $10.6 million, or 1.6%, in 2003 versus 2002. The change in net sales from
2002 to 2003 was due to the following:
                                                                                                       Dollars                Percentage
                                                                                                            (Dollars in millions)
2002 Net sales                                                                                     $       673.6
   Divestitures                                                                                            (13.7)                   (2.0)%
   Volume                                                                                                   15.9                     2.4
   Pricing and product mix                                                                                   8.4                     1.2
2003 Net sales                                                                                     $       684.2                     1.6%


    The Specialty Foods Group sold EBI Foods, Ltd. in October 2002. Excluding the effects of this divestiture, the Specialty Foods
Group’s pickle volumes declined 1.6% in 2003 compared to 2002 due to the bankruptcy of a large customer, and to the overall effects
of economic difficulties in the foodservice sector as a whole. Approximately 28% of the Specialty Foods Group’s sales were to
foodservice customers in 2003. This decrease was more than offset by a 12.8% increase in unit volumes of non-dairy powdered
creamer as a result of new business and a 15.2% increase in unit volumes of nutritional beverages due to increased demand.
   Pricing was up in all categories primarily due to increased raw material costs that were passed on to customers in the form of
higher selling prices. Also, promotional spending that is recorded as a reduction of net sales was down by $15.3 million in 2003
compared to 2002.
    The Specialty Foods Group’s cost of sales ratio increased to 75.3% in 2003 from 73.9% in 2002 as a result of higher raw material
prices, especially glass, and increases in natural gas prices. The Specialty Foods Group uses a significant amount of natural gas in its
operations.
   Operating expenses for the Specialty Foods Group declined to $68 million in 2003 compared to $76.6 million in 2002 primarily
due to the sale of EBI Foods, Ltd. in October 2002, which had higher operating expenses, and to lower bonus expense. Bonus
expenses were $1.3 million less in 2003 as a result of our actual performance compared to bonus targets.

Liquidity and Capital Resources
   Historical Cash Flow
   During 2004, we met our working capital needs with cash flow from operations. Net cash provided by operating activities was
$527.7 million for 2004 as contrasted to $522.3 million for 2003, an increase of $5.4 million. Net cash provided by operating activities
was impacted by:
    • An increase of $79.6 million in net income plus non-cash items in 2004 as compared to 2003 primarily due to the gain on the
      sale of our frozen pre-whipped topping and frozen creamer operations in 2003 offset by;

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    • An increase in our operating working capital of $183.9 in 2004 as compared to $175.6 million in 2003 due primarily to increased
      raw material costs in 2004;
    • A decrease of $10 million in income taxes payable in 2004 compared to an increase of $27.9 million in 2003 as our 2004
      estimated tax payments more closely approximated our tax obligation resulting in a lower tax liability at December 31, 2004;
    • A decrease in prepaid expenses and other assets of $436,000 in 2004 compared to a decrease of $20.7 million in 2003 primarily
      due to higher dispositions of net assets held for sale in 2003; and
    • Lower tax savings on equity compensation of $7.9 million due to fewer stock option exercises in 2004 compared to the prior
      year.
    Net cash used in investing activities was $746.6 million in 2004 compared to $436.2 million in 2003, an increase of
$310.4 million. We used approximately $401.1 million for acquisitions and $356.1 million for capital expenditures in 2004 compared
to $246.6 million and $291.7 million in 2003, respectively. We had cash proceeds from the sale of the frozen pre-whipped topping and
frozen creamer operations and one other small business of $90 million in 2003.
   We used approximately $297 million to repurchase our stock during 2004. Set forth in the chart below is a summary of the stock
we repurchased in 2004:
                                                                      No. of Shares of              Aggregate                 Average
                                                                      Common Stock                  Purchase               Purchase Price
Period                                                                 Repurchased                   Price(1)                Per Share
                                                                                                         (Dollars in millions except
                                                                                                              per share data)
January 2004                                                                   150,000              $      5.2           $         34.42
August 2004                                                                  2,170,000                    78.6                     36.24
September 2004                                                               5,655,000                   173.5                     30.69
October 2004                                                                 1,335,000                    39.7                     29.72
                                                                             9,310,000              $    297.0                     31.90


(1) Includes commissions and fees.
   We received approximately $67.9 million in 2004 as a result of stock option exercises and employee stock purchases through our
employee stock purchase plan.
   We increased our net borrowings by $438.2 million in 2004 compared to a net borrowing of $27 million in 2003.

    Current Debt Obligations
    Senior Credit Facility — Our senior credit facility provides for a $1.5 billion revolving credit facility and a $1.5 billion term loan.
Both the revolving credit facility and term loan bear interest, at our election, at the base rate plus a margin that varies from 0 to
62.5 basis points depending on our credit ratings (as issued by Standard & Poor’s and Moody’s), or LIBOR plus a margin that varies
from 75 to 187.5 basis points, depending on our credit ratings (as issued by Standard & Poor’s and Moody’s). The blended interest
rate in effect on borrowings under the senior credit facility, including the applicable interest rate margin, was 3.72% at December 31,
2004. However, we had interest rate swap agreements in place that hedged $775 million of our borrowings under the senior credit
facility at an average rate of 4.96%, plus the applicable interest rate margin. Interest is payable quarterly or at the end of the applicable
interest period.

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   Principal payments are required on the term loan as follows:
    • $56.25 million quarterly beginning on December 31, 2006 through September 30, 2008;
    • $262.5 million quarterly beginning on December 31, 2008 through June 30, 2009; and
    • A final payment of $262.5 million on the maturity date of August 13, 2009.
   No principal payments are due on the $1.5 billion revolving credit facility until maturity on August 13, 2009.
   The credit agreement also requires mandatory principal prepayments upon the occurrence of certain asset dispositions or recovery
events.
    In consideration for the revolving commitment, we pay a quarterly commitment fee on unused amounts of the revolving credit
facility that ranges from 25 to 37.5 basis points, depending on our credit ratings (as issued by Standard & Poor’s and Moody’s).
    The senior credit facility contains various financial and other restrictive covenants and requires that we maintain certain financial
ratios, including a leverage and interest coverage ratio. We are currently, and have always been, in compliance with all covenants
contained in our credit agreement.
    Our credit agreement permits us to complete acquisitions that meet the following conditions without obtaining prior approval:
(1) the acquired company is involved in the manufacture, processing and distribution of food or packaging products or any other line
of business in which we are currently engaged, (2) the net cash purchase price is not greater than $500 million, (3) we acquire at least
51% of the acquired entity, (4) the transaction is approved by the Board of Directors or shareholders, as appropriate, of the target and
(5) after giving effect to such acquisition on a pro-forma basis, we are in compliance with all financial covenants. All other
acquisitions must be approved in advance by the required lenders.
    The senior credit facility also contains limitations on liens, investments and the incurrence of additional indebtedness, and
prohibits certain dispositions of property and restricts certain payments, including dividends. The senior credit facility is secured by
liens on substantially all of our domestic assets (including the assets of our subsidiaries, but excluding the capital stock of Legacy
Dean’s subsidiaries, and the real property owned by Legacy Dean and its subsidiaries).
    The credit agreement contains standard default triggers, including without limitation: failure to maintain compliance with the
financial and other covenants contained in the credit agreement, default on certain of our other debt, and certain other material adverse
changes in our business, and a change in control. The credit agreement does not contain any default triggers based on our credit rating.
    In August 2004, we amended our senior credit facility to (1) increase the size of our revolving credit facility from $1 billion to
$1.5 billion, (2) increase the size of our term loan A from $850 million to $1.5 billion, (3) eliminate term loans B and C and
(4) modify the interest rate and payment terms. When we amended our credit facility, we were required to write-off approximately
$32.6 million of deferred financing costs that were incurred in connection with our credit facility prior to the amendment. These costs
were being amortized over the previous terms of the revolving credit facility and term loans.
    At December 31, 2004, we had outstanding borrowings of $2.03 billion under our senior credit facility (compared to $1.78 billion
at December 31, 2003), including $1.5 billion in term loan borrowings and $531.1 million outstanding under the revolving line of
credit. At December 31, 2004, there were $129.3 million of letters of credit under the revolving line that were issued but undrawn. As
of March 11, 2005, approximately $1.80 billion was outstanding under our senior credit facility.
    In addition to our senior credit facility, we also have a $500 million receivables-backed credit facility, which had $500 million
outstanding at December 31, 2004 (compared to $302.5 million at December 31, 2003). At December 31, 2004, there was no
remaining availability under this facility. The average interest rate on this facility at December 31, 2004 was 2.83%. In January 2005,
we amended our receivables-backed loan to increase the facility to $600 million. Approximately $546 million was outstanding under
this facility at

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March 11, 2005. See Notes 9 and 23 to our Consolidated Financial Statements for more information about our receivables-backed
facility.
    Our outstanding borrowings under the senior credit facility and receivables-backed credit facility increased from 2003 to 2004
primarily to fund our acquisitions and share repurchases.
    Other indebtedness outstanding at December 31, 2004 included $700 million face value of outstanding indebtedness under Legacy
Dean’s senior notes, a $30.8 million line of credit at our Spanish subsidiary and approximately $30.9 million face value of capital
lease and other obligations. See Note 9 to our Consolidated Financial Statements.
   The table below summarizes our obligations for indebtedness, purchase and lease obligations at December 31, 2004. Please see
Note 18 to our Consolidated Financial Statements for more detail about our lease and purchase obligations.
                                                                                       Payments Due by Period
           Indebtedness, Purchase &
               Lease Obligations                Total           2005            2006             2007           2008       2009      Thereafter
                                                                                               (In millions)
Senior credit facility                        $ 2,031.1     $   —           $  56.3        $   225.0           $ 431.2   $ 1,318.6   $      —
Senior notes(1)                                   700.0       100.0              —             250.0                —        200.0       150.0
Receivables-backed facility                       500.0          —               —             500.0                —           —           —
Foreign line of credit                             30.8        28.5             1.5              0.6               0.2          —           —
Capital lease obligations and other(1)             30.9        13.4             8.0              3.1               1.3         0.5         4.6
Purchasing obligations(2)                         485.1       325.7            55.2             20.6              18.8        16.9        47.9
Operating leases                                  488.3       100.6            83.8             71.3              60.2        56.1       116.3
Interest payments(3)                              330.3        99.4            66.6             37.2              23.6        22.5        81.0
        Total                                 $ 4,596.5     $ 667.6         $ 271.4        $ 1,107.8           $ 535.3   $ 1,614.6   $   399.8


(1) Represents face value.
(2) Primarily represents commitments to purchase minimum quantities of raw materials used in our production processes, including
    organic soybeans, organic raw milk and cucumbers. We enter into these contracts from time to time to ensure a sufficient supply
    of raw ingredients. In addition, we have contractual obligations to purchase various services that are part of our production
    process.
(3) Only includes our fixed rate interest obligations, which consist of our senior notes and our interest rate swap agreements.

    Other Long-Term Liabilities
    We offer pension benefits through various defined benefit pension plans and also offer certain health care and life insurance
benefits to eligible employees and their eligible dependents upon the retirement of such employees. Reported costs of providing
non-contributory defined pension benefits and other postretirement benefits are dependent upon numerous factors, assumptions and
estimates.
    For example, these costs are impacted by actual employee demographics (including age, compensation levels and employment
periods), the level of contributions made to the plan and earnings on plan assets. Our pension plan assets are primarily made up of
equity and fixed income investments. Changes made to the provisions of the plan may also impact current and future pension costs.
Fluctuations in actual equity market returns as well as changes in general interest rates may result in increased or decreased pension
costs in future periods. Pension costs may also be significantly affected by changes in key actuarial assumptions, including anticipated
rates of return on plan assets and the discount rates used in determining the projected benefit obligation and pension costs.
    In accordance with SFAS No. 87, “Employers’ Accounting for Pensions,” changes in pension obligations associated with these
factors may not be immediately recognized as pension costs on the income statement, but generally are recognized in future years over
the remaining average service period of plan participants. As

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such, significant portions of pension costs recorded in any period may not reflect the actual level of cash benefits provided to plan
participants. In 2004, we recorded non-cash expense of $11 million, of which $9.1 million was attributable to periodic expense and
$1.9 million was attributable to settlements compared to a total of $15.3 million in 2003, of which $2.5 million was attributable to
settlements. These amounts were determined in accordance with the provisions of SFAS No. 87 and SFAS No. 88, “Employer’s
Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits.”
    We decreased the assumed discount rate from a range of 6.0% to 6.5% at December 31, 2003 to 5.75% at December 31, 2004. In
selecting assumed rate of return on plan assets, we considered past performance and economic forecasts for the types of investments
held by the plan, as well as our investment allocation policy. Plan asset returns were $14.8 million in 2004, a $10.2 million decrease
from plan asset returns of $25 million in 2003. Net periodic pension expense for our plans is expected to decrease in 2005 to
approximately $10.6 million due primarily to the increase in assets from $151.6 million as of December 31, 2003 to $181 million as of
December 31, 2004. Based on current projections, 2005 funding requirements will be approximately $33.7 million as compared to
$43.8 million for 2004. Additionally, based on current projections, 2005 funding requirements for our other postretirement benefit
obligations will be approximately $1.8 million as compared to $2.8 million in 2004.
    As a result of lower discount rates at December 31, 2004, we were required to recognize an additional minimum liability as
prescribed by SFAS No. 87 and SFAS No. 132, “Employers’ Disclosures about Pensions and Postretirement Benefits.” The
accumulated other comprehensive income component of the additional minimum liability, which totaled $23.3 million ($14.5 million
net of tax), was recorded as a reduction to stockholders’ equity through a charge to Other Comprehensive Income, and did not affect
net income for 2004. The charge to Other Comprehensive Income will be reversed in future periods to the extent the fair value of plan
assets exceeds the accumulated benefit obligation. See Notes 13 and 14 to our Consolidated Financial Statements for information
regarding retirement plans and other postretirement benefits.

    Other Commitments and Contingencies
    On December 21, 2001, in connection with our acquisition of Legacy Dean, we issued a contingent, subordinated promissory note
to Dairy Farmers of America (“DFA”) in the original principal amount of $40 million. DFA is our primary supplier of raw milk, and
the promissory note is designed to ensure that DFA has the opportunity to continue to supply raw milk to certain of our facilities until
2021, or be paid for the loss of that business. The promissory note has a 20-year term and bears interest based on the consumer price
index. Interest will not be paid in cash, but will be added to the principal amount of the note annually, up to a maximum principal
amount of $96 million. We may prepay the note in whole or in part at any time, without penalty. The note will only become payable if
we ever materially breach or terminate one of our milk supply agreements with DFA without renewal or replacement. Otherwise, the
note will expire at the end of 20 years, without any obligation to pay any portion of the principal or interest. Payments we make under
this note, if any, will be expensed as incurred.
     We also have the following commitments and contingent liabilities, in addition to contingent liabilities related to ordinary course
litigation, investigations and audits:
    • certain indemnification obligations related to businesses that we have divested;
    • certain lease obligations, which require us to guarantee the minimum value of the leased asset at the end of the lease; and
    • selected levels of property and casualty risks, primarily related to employee health care, workers’ compensation claims and other
      casualty losses.
   See Note 18 to our Consolidated Financial Statements for more information about our commitments and contingent obligations.

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    Future Capital Requirements
    During 2005, we intend to invest a total of approximately $300 million to $325 million in capital expenditures primarily for our
existing manufacturing facilities and distribution capabilities. We intend to fund these expenditures using cash flow from operations.
We intend to spend this amount as follows:
Operating Division                                                                                             Amount
                                                                                                             (In millions)
Dairy Group                                                                                            $            175 to 180
WhiteWave Foods Company                                                                                             105 to 110
Specialty Foods Group                                                                                                  5 to 10
Other                                                                                                                 15 to 25
   Total                                                                                               $            300 to 325


    In 2005, we expect cash interest to be approximately $170 million based on current debt levels and cash taxes to be approximately
$85 million to $95 million. We expect that cash flow from operations will be sufficient to meet our requirements for our existing
businesses for the foreseeable future. As of March 11, 2005, approximately $1.08 billion was available for future borrowings under
our senior credit facility.

Known Trends and Uncertainties
   Prices of Raw Milk, Cream and Other Inputs
    Dairy Group — The primary raw material used in our Dairy Group is raw milk (which contains both raw skim milk and butterfat).
The federal government and certain state governments set minimum prices for raw milk, and those prices change on a monthly basis.
The regulated minimum prices differ based on how the raw milk is utilized. Raw milk processed into fluid milk is priced at the Class I
price, and raw milk processed into products such as cottage cheese, creams and creamers, ice cream and sour cream is priced at the
Class II price. Generally, we pay the federal minimum prices for raw milk, plus certain producer premiums (or “over-order”
premiums) and location differentials. We also incur other raw milk procurement costs in some locations (such as hauling, field
personnel, etc.). A change in the federal minimum price does not necessarily mean an identical change in our total raw milk costs, as
over-order premiums may increase or decrease. This relationship is different in every region of the country, and sometimes within a
region based on supplier arrangements. However, in general, the overall change in our raw milk costs can be linked to the change in
federal minimum prices.
    In general, our Dairy Group changes the prices that it charges for Class I dairy products on a monthly basis, as the costs of raw
milk and other materials fluctuate. Prices for some Class II products are not changed on a monthly basis, but are changed from time to
time as circumstances warrant. There can be a lag between the time of a raw material cost increase or decrease and the effectiveness of
a corresponding price change to our customers, especially in the case of Class II butterfat because Class II butterfat prices for each
month are not announced by the government until after the end of that month. Also, in some cases we are competitively or
contractually constrained with the means and timing of implementing price changes. These factors can cause volatility in our earnings.
Our sales and operating profit margin fluctuate with the price of our raw materials and other inputs.
    In 2004, our Dairy Group was adversely affected by extreme volatility in the prices of raw skim milk and butterfat. In 2005, we
expect prices to be somewhat less volatile and lower than the average price in 2004. Of course raw milk prices are difficult to predict
and we change our forecasts frequently based on current market activity. If raw milk prices do remain at or near current levels
throughout 2005, we would expect our sales for 2005 to be less than in 2004 because, in general, we change the prices of our products
to reflect changes in raw material prices.
    Because our Class II products typically have a higher fat content than that contained in raw milk, we also purchase bulk cream for
use in some of our Class II products. Bulk cream is typically purchased based on a

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multiple of the AA butter price on the Chicago Mercantile Exchange. The prices of AA butter started rising by moderate amounts in
late 2003, and then increased significantly in 2004. They remained high throughout 2004 and we expect the average price to be
somewhat lower in 2005 than the average price in 2004. Of course, like raw milk prices, bulk cream prices are difficult to predict and
we change our forecasts frequently based on current market activity. We try to change our prices based on changes in the price of bulk
cream, but sometimes we are competitively or contractually constrained. Therefore, increases in bulk cream prices can have an
adverse effect on our results of operations.
    Prices for resin, which is used in plastic milk bottles, are also extremely high and are expected to remain high for the foreseeable
future. Finally, the Dairy Group uses a great deal of diesel fuel in its direct store delivery system, and diesel fuel prices are currently
very high and expected to remain high for the foreseeable future. High or volatile fuel and resin costs can adversely affect the Dairy
Group’s profitability.
    WhiteWave Foods Company — A significant raw material used to manufacture products sold by WhiteWave Foods Company is
organic soybeans. We have entered into supply agreements for organic soybeans, which we believe will meet our needs for 2005.
Generally, these agreements provide for pricing at fixed levels. However, should our need for organic soybeans exceed the quantity
that we have under contract, or if the suppliers do not perform under the contracts, we may have difficulty obtaining sufficient supply,
and the price we would be required to pay would likely be significantly higher. The increase in soymilk consumption combined with
the increased demand for organic cattle feed has put pressure on the supply of organic soybeans and there is significant upward
pressure on organic soybean prices. We believe prices for organic soybeans will continue to increase as the pressure on supply
continues.
    Another significant raw material used in our organic products is organic raw milk. Organic raw milk is not readily available and
the growth of our organic dairy business depends on us being able to procure sufficient quantities of organic raw milk in time to meet
our needs. We obtain our supply of organic raw milk by entering into one to two year agreements with farmers pursuant to which the
farmers agree to sell us specified quantities of organic raw milk for fixed prices for the duration of the agreement We believe, based
on currently projected sales levels, that we have secured a sufficient supply of raw organic milk to meet our raw organic milk needs
for the remainder of 2005. However, should our need for organic raw milk exceed the quantity that we have under contract, or if the
suppliers do not perform under the contracts, we may have difficulty obtaining sufficient supply, and the price we would be required
to pay, if we could obtain supply at all, would likely be significantly higher. Also, as our contracts with farmers expire, we are
generally required to agree to higher prices to renew as a result of increased competition for organic raw milk supply. For competitive
reasons, WhiteWave Foods Company is not able to pass along price increases to customers as quickly as the Dairy Group.
    Specialty Foods Group — Many of the raw materials used by our Specialty Foods Group also rose to unusually high levels during
2004, including soybean oil, casein, cheese and packaging materials. High fuel costs have also had a negative impact on the Specialty
Foods Group’s results. Prices for many of these raw materials and packaging materials used by the Specialty Foods Group are
expected to remain high and in some cases increase in 2005. For competitive reasons, the Specialty Foods Group is not able to pass
along increases in raw material and other input costs as quickly as the Dairy Group. Therefore, the current raw material environment is
expected to continue to adversely affect the Specialty Foods Group’s financial results in 2005.

    Competitive Environment
    There has been significant consolidation in the retail grocery industry in recent years, and this trend is continuing. As our customer
base consolidates, we expect competition to intensify as we compete for the business of fewer customers. There can be no assurance
that we will be able to keep our existing customers, or gain new customers. There are several large regional grocery chains that have
captive dairy operations. As the consolidation of the grocery industry continues, we could lose sales if any one or more of our existing
customers were to be sold to a chain with captive dairy operations.

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    Many of our retail customers have become increasingly price sensitive in the current intensely competitive environment. Over the
past few years, we have been subject to a number of competitive bidding situations in our Dairy Group and Specialty Foods Group
segments, which reduced our profitability on sales to several customers. We expect this trend to continue. In bidding situations we are
subject to the risk of losing certain customers altogether. The loss of any of our largest customers could have a material adverse
impact on our financial results. We do not have contracts with many of our largest customers, and most of the contracts that we do
have are generally terminable at will by the customer.
   Both the difficult economic environment and the increased competitive environment at the retail level have caused competition to
become increasingly intense at the processor level. We expect this trend to continue for the foreseeable future.
    Tax Rate
    Our 2004 tax rate was 38.3%. We estimate the effective tax for 2005 to be slightly less than 38%. Changes in the relative
profitability of our operating segments, as well as recent and proposed changes to federal and state tax codes may cause the rate to
change from historical rates.
   See “— Risk Factors” for a description of various other risks and uncertainties concerning our business.
Critical Accounting Policies
    “Critical accounting policies” are defined as those that are both most important to the portrayal of a company’s financial condition
and results, and that require our most difficult, subjective or complex judgments. In many cases the accounting treatment of a
particular transaction is specifically dictated by generally accepted accounting principles with no need for the application of our
judgment. In certain circumstances, however, the preparation of our Consolidated Financial Statements in conformity with generally
accepted accounting principles requires us to use our judgment to make certain estimates and assumptions. These estimates affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the Consolidated Financial
Statements and the reported amounts of net sales and expenses during the reporting period. We have identified the policies described
below as our critical accounting policies. See Note 1 to our Consolidated Financial Statements for a detailed discussion of these and
other accounting policies.
    Accounts Receivable — We provide credit terms to customers generally ranging up to 30 days, perform ongoing credit evaluations
of our customers and maintain allowances for estimated credit losses. As these factors change, our estimates change and we could
accrue different amounts for doubtful accounts in different accounting periods. At December 31, 2004, our allowance for doubtful
accounts was approximately $24.2 million, or approximately 3% of the accounts receivable balance at December 31, 2004. The
allowance for doubtful accounts, expressed as a percent of accounts receivable, was approximately 4% at December 31, 2003. Each
0.10% change in the ratio of allowance for doubtful accounts to accounts receivable would impact bad debt expense by approximately
$880,000.
    Goodwill and Intangible Assets — Our goodwill and intangible assets totaled $4.14 billion as of December 31, 2004 resulting
primarily from acquisitions. Upon acquisition, the purchase price is first allocated to identifiable assets and liabilities, including
trademarks and customer-related intangible assets, with any remaining purchase price recorded as goodwill. Goodwill and trademarks
with indefinite lives are not amortized.
    We believe that a trademark has an indefinite life if it has sufficient market share and a history of strong sales and cash flow
performance that we expect to continue for the foreseeable future. If these perpetual trademark criteria are not met, the trademarks are
amortized over their expected useful lives, which generally range from five to 40 years. Determining the expected life of a trademark
requires considerable management judgment and is based on an evaluation of a number of factors including the competitive
environment, market share, trademark history and anticipated future trademark support.
   Perpetual trademarks and goodwill are evaluated for impairment at least annually to ensure that future cash flows continue to
exceed the related book value. A perpetual trademark is impaired if its book value

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exceeds fair value. Goodwill is evaluated for impairment if the book value of its reporting unit exceeds its fair value. A reporting unit
can be a segment or an operating division. If the fair value of an evaluated asset is less than its book value, the asset is written down to
fair value based on its discounted future cash flows.
   Amortizable intangible assets are only evaluated for impairment upon a significant change in the operating environment. If an
evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is
generally based on discounted future cash flows.
    Considerable management judgment is necessary to evaluate the impact of operating changes and to estimate future cash flows.
Assumptions used in our impairment evaluations, such as forecasted growth rates and our cost of capital, are consistent with our
internal projections and operating plans.
   We did not recognize any impairment charges for perpetual trademarks or goodwill during 2004.
    Purchase Price Allocation — We allocate the cost of acquisitions to the assets acquired and liabilities assumed. All identifiable
assets acquired, including identifiable intangibles, and liabilities assumed are assigned a portion of the cost of the acquired company,
normally equal to their fair values at the date of acquisition. The excess of the cost of the acquired company over the sum of the
amounts assigned to identifiable assets acquired less liabilities assumed is recorded as goodwill. We record the initial purchase price
allocation based on evaluation of information and estimates available at the date of the financial statements. As final information
regarding fair value of assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are made
to the purchase price allocation. To the extent that such adjustments indicate that the fair values of assets and liabilities differ from
their preliminary purchase price allocations, such difference would adjust the amounts allocated to those assets and liabilities and
would change the amounts allocated to goodwill. The final purchase price allocation includes the consideration of a number of factors
to determine the fair value of individual assets acquired and liabilities assumed including quoted market prices, forecast of expected
cash flows, net realizable values, estimates of the present value of required payments and determination of remaining useful lives.
     Income Taxes — Deferred taxes are recognized for future tax effects of temporary differences between financial and income tax
reporting using tax rates in effect for the years in which the differences are expected to reverse. We periodically estimate our probable
tax obligations using historical experience in tax jurisdictions and informed judgments. There are inherent uncertainties related to the
interpretations of tax regulations in the jurisdictions in which we operate. These judgments and estimates made at a point in time may
change based on the outcome of tax audits and changes to or further interpretations of regulations. If such changes take place, there is
a risk that our tax rate may increase or decrease in any period, which could have an impact on our earnings. Future business results
may affect deferred tax liabilities or the valuation of deferred tax assets over time. Our valuation allowance increased $1.2 million in
2004 due to the increased likelihood that state net operating losses will expire before they are used.
    Insurance Accruals — We retain selected levels of property and casualty risks, primarily related to employee health care, workers’
compensation claims and other casualty losses. Many of these potential losses are covered under conventional insurance programs
with third-party carriers with high deductible limits. In other areas, we are self-insured with stop-loss coverages. Accrued liabilities for
incurred but not reported losses related to these retained risks are calculated based upon loss development factors which contemplate a
number of variables including claims history and expected trends. These loss development factors are developed by us in consultation
with external insurance brokers and actuaries. At December 31, 2004 and 2003, we recorded accrued liabilities related to these
retained risks of $146.1 million and $136.3 million, respectively, including both current and long-term liabilities.
    Employee Benefit Plan Costs — We provide a range of benefits to our employees including pension and postretirement benefits to
our eligible employees and retirees. We record annual amounts relating to these plans based on calculations specified by generally
accepted accounting principles, which include various actuarial assumptions, such as discount rates, assumed investment rates of
return, compensation increases, employee turnover rates and health care cost trend rates. We review our actuarial assumptions on an
annual

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basis and make modifications to the assumptions based on current rates and trends when it is deemed appropriate. As required by
generally accepted accounting principles, the effect of the modifications is generally recorded and amortized over future periods.
Different assumptions that we make could result in the recognition of different amounts of expense over different periods of time.
    In 2004, we consolidated substantially all of our qualified pension plans into one master trust. We retained investment consultants
to assist our Investment Committee with the transition of the plans’ assets to the master trust and to help our Investment Committee
formulate a long-term investment policy for the newly established master trust. Our current asset mix guidelines under the investment
policy target equities at 65% to 75% of the portfolio and fixed income at 25% to 35%. At December 31, 2004, our master trust was
invested as follows: equity securities and limited partnerships — 74%; fixed income securities — 25%; and cash and cash
equivalents — 1%.
   We determine our expected long-term rate of return based on our expectations of future returns for the pension plan’s investments
based on target allocations of the pension plan’s investments. Additionally, we consider the weighted-average return of a capital
markets model that was developed by the plans’ investment consultants and historical returns on comparable equity, debt and other
investments. The resulting weighted average expected long-term rate of return on plan assets is 8.5%.
    While a number of the key assumptions related to our qualified pension plans are long-term in nature, including assumed
investment rates of return, compensation increases, employee turnover rates and mortality rates, generally accepted accounting
principles require that our discount rate assumption be more heavily weighted to current market conditions. As such, our discount rate
likely will change more frequently. In 2004 we reduced the discount rate utilized to determine our estimated future benefit obligations
from a range of 6.0% to 6.5% at December 31, 2003 to 5.75% at December 31, 2004.
   A 0.25% reduction in the assumed rate of return on plan assets or a 0.25% reduction in the discount rate would increase our annual
pension expense by approximately $412,000 and $489,000, respectively. In addition, a 1% increase in assumed healthcare costs trends
would increase the aggregate annual post retirement medical expense by approximately $184,000.

Recent Accounting Pronouncements
    Recently Adopted Accounting Pronouncements — In December 2003, the Financial Accounting Standards Board (“FASB”) issued
SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits” in an attempt to improve
financial statement disclosures regarding defined benefit plans. This standard requires that companies provide more details about their
plan assets, benefit obligations, cash flows, benefit costs and other relevant information. In addition to expanded annual disclosures,
we are required to report the various elements of pension and other postretirement benefit costs on a quarterly basis. SFAS No. 132
(revised 2003) is effective for fiscal years ending after December 15, 2003, and for quarters beginning after December 15, 2003. The
expanded disclosure requirements are included in this report.
    On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was signed into
law. The Act introduces a prescription drug benefit under Medicare Part D, as well as a federal subsidy to sponsors of retiree health
care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In April 2004, the FASB issued Staff
Position (“FSP”) No. SFAS 106-2 to address the accounting and disclosure requirements related to the Act. The FSP is effective for
interim or annual periods beginning after September 15, 2004. Substantially all of our postretirement benefits terminate at age 65.
Therefore, the FSP will have no material affect on our Consolidated Financial Statements.
    Recently Issued Accounting Pronouncements — The FASB issued SFAS No. 123(R), “Share-Based Payment” in December 2004.
It will require the cost of employee compensation paid with equity instruments to be measured based on grant-date fair values. That
cost will be recognized over the vesting period. SFAS No. 123(R) will become effective for us in the third quarter 2005. We are still
evaluating the impact of

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SFAS No. 123(R) on our Consolidated Financial Statements and have not yet determined the transition method we will apply when
we adopt the statement. See Note 1 to our Consolidated Financial Statements-“Stock-Based Compensation” for illustrations of the pro
forma impact of expensing our stock options in the historical periods.
    In November 2004, the FASB issued SFAS No. 151, “Inventory Costs — an Amendment of ARB No. 43, Chapter 4.”
SFAS No. 151, which is effective for inventory costs incurred during years beginning after June 15, 2005, clarifies the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted material, requiring that those items be recognized as
current-period charges. In addition, SFAS No. 151 requires that allocation of fixed production overheads be based on the normal
capacity of the production facilities. We do not believe the adoption of this standard will have a material impact on our Consolidated
Financial Statements.
    In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets, an amendment of APB Opinion
No. 29.” SFAS No. 153 is effective for nonmonetary exchanges occurring in years beginning after June 15, 2005. SFAS No. 153
eliminates the rule in APB No. 29 which excluded from fair value measurement exchanges of similar productive assets. Instead,
SFAS No. 153 excludes from fair value measurement exchanges of nonmonetary assets that do not have commercial substance. We do
not believe the adoption of this standard will have a material impact on our Consolidated Financial Statements.

Risk Factors
    This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Statements that are not historical in nature are forward-looking statements about our future that are not statements of historical fact.
Most of these statements are found in this report under the following subheadings: “Part I — Item 1. Business,” “Part II — Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II — Item 7A. Quantitative and
Qualitative Disclosures About Market Risk.” In some cases, you can identify these statements by terminology such as “may,” “will,”
“should,” “could,” “expects,” “seek to,” “anticipates,” “plans,” “believes,” “estimates,” “intends,” “predicts,” “projects,” “potential”
or “continue” or the negative of such terms and other comparable terminology. These statements are only predictions, and in
evaluating those statements, you should carefully consider the information above in “— Known Trends and Uncertainties,” as well as
the risks outlined below. Actual performance or results may differ materially and adversely.

    Reorganization of our WhiteWave Foods Company Segment Could Temporarily Adversely Affect the Performance of the
    Segment
    In the third quarter of 2004, we began the process of consolidating the operations of the three operating units that comprise our
WhiteWave Foods Company segment into a single business. We have completed the consolidation of the sales, marketing and
research and development organization for the three companies, and in the third quarter of 2005, the employees of the new company
will move to a new headquarters located in Broomfield, Colorado. The full integration of these businesses will be a lengthy process
involving all aspects of the three company’s operations, including purchasing, manufacturing, distribution and administration, and will
include the selection and implementation of a new information technology platform. As part of our overall reorganization of
WhiteWave Foods Company into a unified branded consumer packaged goods company, we also intend to bring in-house certain
manufacturing activities that are currently being done by third parties. We expect the consolidation to be completed in the next 12 to
18 months. This process presents a number of challenges and requires a significant amount of management’s attention. Our failure to
successfully manage this process could cause us to incur unexpected costs or to lose customers or sales, which could have a material
adverse effect on our financial results.
    In addition, effective March 11, 2005, Mr. Steve Demos, President of WhiteWave Foods Company resigned his position. We have
retained a leading executive recruiting firm to assist in the search for a new president. Mr. Gregg Engles, our Chairman of the Board
and Chief Executive Officer, has assumed direct leadership of WhiteWave Foods Company on an interim basis. This transition could
be disruptive to us in the short term.

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    Spin-Off of our Specialty Foods Group
    In January 2005, we announced our intent to pursue a tax-free spin-off of our Specialty Foods Group segment to our shareholders.
Separating the Specialty Foods Group segment from our business, and completing the successful spin-off will require a number of
operational, legal and regulatory steps be successfully completed. Completing these steps presents a number of challenges and will
require a significant amount of management’s attention. Our failure to successfully manage the process could cause us to incur
unexpected costs or to lose customers or sales. In addition, the spin-off is dependent upon the receipt of a favorable private letter
ruling from the Internal Revenue Service on the tax-free nature of the transaction. If we fail to receive a favorable letter ruling, the
spin-off will not occur.

    Recent Financial Difficulty at Specialty Foods Group Segment Could Continue Longer Than We Expect
    Our Specialty Foods Group segment experienced financial difficulty during 2004 due primarily to rising input costs and to a
decline in demand for Specialty Foods Groups’ line of nutritional beverages. We exited the nutritional beverages business at the end
of 2004. Also, the former President of the Specialty Foods Group segment returned to run the business in late October. With these
changes and certain other changes we are implementing at the Specialty Foods Group, it is our goal to return the Specialty Foods
Group segment to its historical levels of profitability in 2005. However, there can be no assurance as to how long it will take to return
the Specialty Foods Group to its historical levels of profitability, if ever. Many factors are beyond our control, such as the costs of raw
materials and packaging supplies and competitive pressures that limit our ability to raise prices in reaction to increased input costs.

    Recent Successes of Our Products Could Attract Increased Competitive Activity, Which Could Impede Our Growth Rate and
    Cost Us Sales and, in the Case of Organic Products, Put Pressure on the Availability of Raw Materials
    Our Silk soymilk and Horizon Organic organic food and beverage products have leading market shares in their categories and
have benefited in many cases from being the first to introduce products in their categories. As soy and organic products continue to
gain in popularity with consumers, we expect our products in these categories to continue to attract competitors. Many large food and
beverage companies have substantially more resources than we do and they may be able to market their soy and organic products
more successfully than us, which could cause our growth rate in these categories to be slower than our forecast and could cause us to
lose sales. The increase in popularity of soy and organic milks is also attracting private label competitors who sell their products at a
lower price. The success of private label brands could adversely affect our sales and profitability. Finally, there is a limited supply of
organic raw materials in the United States, especially organic soybeans and organic raw milk. New entrants into our markets can
reduce available supply and drive up costs. Even without new entrants, our own rapid growth can put pressure on the availability and
price of organic raw materials.
    Our International Delight coffee creamer competes intensely with Nestlé CoffeeMate business, and our Hershey’s milks and
milkshakes compete intensely with Nestlé Nesquik. Nestle has significantly greater resources than we do, which allows them to
promote their products more aggressively. Our failure to successfully compete with Nestle could have a material adverse effect on the
sales and profitability of our International Delight and/or our Hershey’s businesses.

    Loss of Rights to Any of Our Licensed Brands Could Adversely Affect Our Sales and Profits
    We sell certain of our products under licensed brand names such as Borden®, Hershey’s, LAND O’LAKES, Pet® and others. In
some cases, we have invested significant capital in product development and marketing and advertising related to these licensed
brands. Should our rights to manufacture and sell products under any of these names be terminated for any reason, our financial
performance and results of operations could be materially and adversely affected.

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    We Have Substantial Debt and Other Financial Obligations and We May Incur Even More Debt
   We have substantial debt and other financial obligations and significant unused borrowing capacity. See “— Liquidity and Capital
Resources.”
    We have pledged substantially all of our assets (including the assets of our subsidiaries) to secure our indebtedness. Our high debt
level and related debt service obligations:
    • require us to dedicate significant cash flow to the payment of principal and interest on our debt which reduces the funds we have
      available for other purposes,
    • may limit our flexibility in planning for or reacting to changes in our business and market conditions,
    • impose on us additional financial and operational restrictions, and
    • expose us to interest rate risk since a portion of our debt obligations are at variable rates.
   The interest rate on our debt is based on our debt rating, as issued by Standard & Poor’s and Moody’s. We have no ability to
control the ratings issued by Standard & Poor’s and Moody’s. A downgrade in our debt rating could cause our interest rate to increase,
which could adversely affect our ability to achieve our targeted profitability level, as well as our cash flow.
    Our ability to make scheduled payments on our debt and other financial obligations depends on our financial and operating
performance. Our financial and operating performance is subject to prevailing economic conditions and to financial, business and
other factors, some of which are beyond our control. A significant increase in interest rates could adversely impact our net income. If
we do not comply with the financial and other restrictive covenants under our credit facilities, we may default under them. Upon
default, our lenders could accelerate the indebtedness under the facilities, foreclose against their collateral or seek other remedies,
which would jeopardize our ability to continue our current operations.
    We intend to pursue a tax free spin-off of our Specialty Foods Group. Our Specialty Foods Group generates positive cash flow
from operations. The loss of income from the Specialty Foods Group will cause compliance with our debt covenant ratios to become
more difficult. We intend to pay down some of our debt in 2005 to offset the effect of the Specialty Foods Group spin-off on our
ratios; however, there can be no assurance that we will successfully pay down our debt.

Item 7A.      Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Fluctuations
    In order to reduce the volatility of earnings that arises from changes in interest rates, we manage interest rate risk through the use
of interest rate swap agreements. These swap agreements provide hedges for loans under our senior credit facility by limiting or fixing
the LIBOR interest rates specified in the senior credit facility at the interest rates noted below until the indicated expiration dates.
    These swaps have been designated as cash flow hedges against variable interest rate exposure. The following table summarizes our
various interest rate swap agreements in effect as of December 31, 2004:
                                                                                                                        Notional
Fixed Interest Rates                                                                 Expiration Date
                                                                                                                        Amounts
                                                                                                                      (In millions)
5.20% to 6.74%                                                                           December 2005            $             400
3.65% to 6.78%                                                                           December 2006                          375

    The following table summarizes our various interest rate swap agreements as of December 31, 2003:
                                                                                                                        Notional
Fixed Interest Rates                                                                 Expiration Date
                                                                                                                        Amounts
                                                                                                                      (In millions)
1.48% to 6.69%                                                                           December 2004            $             650
5.20% to 6.74%                                                                           December 2005                          400
6.78%                                                                                    December 2006                           75

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    We are exposed to market risk under these arrangements due to the possibility of interest rates on our credit facilities falling below
the rates on our interest rate derivative agreements. We incurred $20.7 million of additional interest expense, net of taxes, during 2004
as a result of interest rates on our variable rate debt falling below the agreed-upon interest rate on our existing swap agreements.
Credit risk under these arrangements is remote since the counterparties to our interest rate derivative agreements are major financial
institutions.
    A majority of our debt obligations are currently at variable rates. We have performed a sensitivity analysis assuming a hypothetical
10% adverse movement in interest rates. As of December 31, 2004 and 2003, the analysis indicated that such interest rate movement
would not have a material effect on our financial position, results of operations or cash flows. However, actual gains and losses in the
future may differ materially from that analysis based on changes in the timing and amount of interest rate movement and our actual
exposure and hedges.

Foreign Currency
    We are exposed to foreign currency risk due to operating cash flows and various financial instruments that are denominated in
foreign currencies. Our most significant foreign currency exposures relate to the euro and the British pound. We have performed a
sensitivity analysis assuming a hypothetical 10% adverse movement in foreign currency exchange rates. As of December 31, 2004 and
2003, the analysis indicated that such foreign currency exchange rate change would not have a material effect on our financial
position, results of operations or cash flows.

Butterfat
    Our Dairy Group utilizes a significant amount of butterfat to produce Class II products. This butterfat is acquired through the
purchase of raw milk and bulk cream. Butterfat acquired in raw milk is priced based on the Class II butterfat price in federal orders,
which is announced near the end of the applicable month. The Class II butterfat price can generally be tied to pricing of AA butter
traded on the Chicago Mercantile Exchange (“CME”). The cost of butterfat acquired in bulk cream is typically based on a multiple of
the AA butter price on the CME. From time to time, we purchase butter futures and butter inventory in an effort to better manage our
butterfat cost in Class II products. Futures contracts are marked to market in accordance with SFAS No. 133 “Accounting for
Derivative Instruments and Hedging Activities,” and physical inventory is valued at the lower of cost or market. We are exposed to
market risk under these arrangements if the cost of butter falls below the cost that we have agreed to pay in a futures contract or that
we actually paid for the physical inventory and we are unable to pass on the difference to our customers. At this time we believe that
potential losses due to butterfat hedging activities would not have a material impact on our consolidated financial position, results of
operations or operating cash flow. During 2004, we recognized losses of $2.5 million, net of tax, related to our butterfat hedging
activities.

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Item 8.   Consolidated Financial Statements
   Our Consolidated Financial Statements for 2004 are included in this report on the following pages.

                                                                                                        Page
Management Report on Internal Controls Over Financial Reporting                                           F-1
Report of Independent Registered Public Accounting Firm                                                   F-2
Consolidated Balance Sheets as of December 31, 2004 and 2003                                              F-4
Consolidated Statements of Income for the years ended December 31, 2004, 2003 and 2002                    F-5
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2004, 2003 and 2002      F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002                F-7
Notes to Consolidated Financial Statements

     1.                    Summary of Significant Accounting Policies                                     F-8

     2.                    Acquisitions, Divestitures and Discontinued Operations                        F-12

     3.                    Investments in Unconsolidated Affiliates                                      F-16

     4.                    Inventories                                                                   F-17

     5.                    Property, Plant and Equipment                                                 F-18

     6.                    Intangible Assets                                                             F-18

     7.                    Accounts Payable and Accrued Expenses                                         F-20

     8.                    Income Taxes                                                                  F-20

     9.                    Long-Term Debt                                                                F-22

    10.                    Mandatorily Redeemable Trust Issued Preferred Securities                      F-25
    11.                    Stockholders’ Equity                                                          F-25
    12.                    Other Comprehensive Income                                                    F-30
    13.                    Employee Retirement and Profit Sharing Plans                                  F-30
    14.                    Postretirement Benefits Other Than Pensions                                   F-33
    15.                    Facility Closing and Reorganization Costs                                     F-35
    16.                    Other Operating (Income) Expense                                              F-38
    17.                    Supplemental Cash Flow Information                                            F-39
    18.                    Commitments and Contingencies                                                 F-39
    19.                    Fair Value of Financial Instruments                                           F-41
    20.                    Segment and Geographic Information and Major Customers                        F-41
    21.                    Quarterly Results of Operations (unaudited)                                   F-44
    22.                    Related Party Transactions                                                    F-45
    23.                    Subsequent Events (unaudited)                                                 F-45

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                    MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal
control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and
fair presentation of published financial statements.
    All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to
be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
    We have assessed the effectiveness of our internal control over financial reporting as of December 31, 2004. In making this
assessment, we used the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on our assessment we believe that, as of December 31, 2004, our internal
control over financial reporting is effective based on those criteria.
    Our independent registered public accounting firm has issued an audit report on our assessment of our internal control over
financial reporting. This report appears on page F-2.

March 14, 2005

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                         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Dean Foods Company
Dallas, Texas
    We have audited the accompanying consolidated balance sheets of Dean Foods Company and subsidiaries (the “Company”) as of
December 31, 2004 and 2003, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the
three years in the period ended December 31, 2004. We also have audited management’s assessment, included in the accompanying
Management’s Report on Internal Control Over Financial Reporting that the Company maintained effective internal control over
financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these financial
statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting. Our responsibility is to express an opinion on these financial statements, an opinion on management’s
assessment, and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audits.
    We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.
Our audit of financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of
internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.
    A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s
principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of
directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s
internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
    Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.
Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the
risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
    In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Dean Foods Company and subsidiaries as of December 31, 2004 and 2003, and the results of their operations and
their cash flows for each of the three years in the period

                                                                    F-2




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America. Also, in our
opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31,
2004, is fairly stated, in all material respects, based on the criteria established in Internal Control — Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, in our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2004, based on the criteria established in
Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
   As discussed in Note 1 to the consolidated financial statements, in 2002 the Company changed its method of accounting for
goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142.


DELOITTE & TOUCHE LLP

Dallas, Texas
March 14, 2005

                                                                  F-3




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents



                                                  DEAN FOODS COMPANY
                                              CONSOLIDATED BALANCE SHEETS

                                                                                                      December 31
                                                                                           2004                            2003
                                                                                                  (Dollars in thousands,
                                                                                                    except share data)
                                     ASSETS
Current assets:
   Cash and cash equivalents                                                       $          27,572               $          47,143
   Receivables, net of allowance for doubtful accounts of $24,233 and $32,684                861,759                         742,934
   Inventories                                                                               479,981                         426,478
   Deferred income taxes                                                                     150,151                         137,055
   Prepaid expenses and other current assets                                                  76,961                          47,271
       Total current assets                                                                1,596,424                       1,400,881
Property, plant and equipment                                                              1,946,992                       1,773,555
Goodwill                                                                                   3,490,129                       3,197,548
Identifiable intangible and other assets                                                     722,823                         620,552
       Total                                                                       $       7,756,368               $       6,992,536

              LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
   Accounts payable and accrued expenses                                           $         925,199               $         924,707
   Income taxes payable                                                                       40,000                          65,528
   Current portion of long-term debt                                                         141,227                         180,158
       Total current liabilities                                                           1,106,426                       1,170,393
Long-term debt                                                                             3,116,032                       2,611,356
Deferred income taxes                                                                        531,242                         388,151
Other long-term liabilities                                                                  341,531                         279,823
Commitments and contingencies (Note 18)
Stockholders’ equity:
   Preferred stock, none issued
   Common stock, 149,222,997 and 154,993,214 shares issued and outstanding,
     with a par value of $0.01 per share                                                       1,492                           1,550
   Additional paid-in capital                                                              1,308,172                       1,498,025
   Retained earnings                                                                       1,359,632                       1,074,258
   Accumulated other comprehensive income (loss)                                              (8,159)                        (31,020)
       Total stockholders’ equity                                                          2,661,137                       2,542,813
       Total                                                                       $       7,756,368               $       6,992,536


                                         See Notes to Consolidated Financial Statements.

                                                               F-4




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents



                                                     DEAN FOODS COMPANY
                                         CONSOLIDATED STATEMENTS OF INCOME
                                                                                    Year Ended December 31
                                                                  2004                         2003                       2002
                                                                             (Dollars in thousands, except share data)
Net sales                                                    $    10,822,285          $         9,184,616            $     8,991,464
Cost of sales                                                      8,257,756                    6,808,207                  6,642,773
Gross profit                                                       2,564,529                    2,376,409                  2,348,691
Operating costs and expenses:
    Selling and distribution                                       1,512,507                    1,345,065                  1,321,763
    General and administrative                                       349,683                      317,342                    337,496
    Amortization of intangibles                                        6,650                        4,949                      7,775
    Facility closing and reorganization costs                         34,695                       11,787                     19,050
    Other operating income                                            (5,899)                     (68,719)                        —
            Total operating costs and expenses                     1,897,636                    1,610,424                  1,686,084
Operating income                                                     666,893                      765,985                    662,607
Other (income) expense:
    Interest expense                                                   204,770                    181,134                    197,685
    Financing charges on trust issued preferred securities                  —                      14,164                     33,578
    Equity in (earnings) losses of unconsolidated
      affiliates                                                            —                        (244)                     7,899
    Other (income) expense, net                                           (253)                    (2,625)                     2,660
            Total other expense                                        204,517                    192,429                    241,822
Income from continuing operations before income taxes                  462,376                    573,556                    420,785
Income taxes                                                           177,002                    217,853                    152,988
Minority interest in earnings                                               —                          —                          46
Income from continuing operations                                      285,374                    355,703                    267,751
Loss on sale of discontinued operations, net of tax                         —                          —                      (8,231)
Income from discontinued operations, net of tax                             —                          —                         879
Income before cumulative effect of accounting change                   285,374                    355,703                    260,399
Cumulative effect of accounting change, net of tax                          —                          —                     (84,983)
Net income                                                   $         285,374        $           355,703            $       175,416
Average common shares:
    Basic                                                        154,635,979                 145,201,412                 135,031,274
    Diluted                                                      160,704,576                 160,695,670                 163,163,904
Basic earnings per common share:
    Income from continuing operations                        $            1.85        $                2.45          $           1.98
    Loss from discontinued operations                                       —                            —                       (.05)
    Cumulative effect of accounting change                                  —                            —                       (.63)
    Net income                                               $            1.85        $                2.45          $           1.30
Diluted earnings per common share:
    Income from continuing operations                        $            1.78        $                2.27          $           1.77
    Loss from discontinued operations                                       —                            —                       (.05)
    Cumulative effect of accounting change                                  —                            —                       (.51)
    Net income                                               $            1.78        $                2.27          $           1.21


                                           See Notes to Consolidated Financial Statements.

                                                                 F-5




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents



                                                       DEAN FOODS COMPANY
                                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

                                                                                                      Accumulated
                                                                                                          Other           Total
                                     Common Stock             Additional             Retained        Comprehensive    Stockholders’   Comprehensive
                                   Shares         Amount    Paid-In Capital          Earnings         Income (Loss)      Equity          Income
                                                                     (Dollars in thousands, except share data)
Balance, January 1, 2002          131,809,470    $ 1,318    $     961,266        $     543,139      $    (29,843)     $ 1,475,880
      Issuance of common
        stock                       5,278,170         53            88,578                   —                 —            88,631
      Reclassification of
        Legacy Dean stock
        option liability                  —           —             30,461                   —                 —            30,461
      Purchase and
        retirement of
        treasury stock             (4,126,200)       (41)        (101,192)                  —                  —         (101,233)
      Net income                           —          —                —               175,416                 —          175,416     $   175,416
      Other comprehensive
        income (Note 12):
      Change in fair value of
        derivative
        instruments                       —           —                  —                   —           (46,803)          (46,803)       (46,803)
      Amounts reclassified
        to income statement
        related to derivatives            —           —                  —                   —            24,014            24,014         24,014
      Cumulative translation
        adjustment                        —           —                  —                   —              8,408            8,408          8,408
      Minimum pension
        liability adjustment              —           —                  —                   —           (11,481)          (11,481)       (11,481)
      Comprehensive
        income                                                                                                                        $   149,554
Balance, December 31, 2002        132,961,440      1,330          979,113              718,555           (55,705)       1,643,293
      Issuance of common
        stock                       5,798,235         58          121,592                    —                 —          121,650
      Exchange of trust
        issued preferred
        securities                 22,901,839        229          582,757                    —                 —          582,986
      Purchase and
        retirement of
        treasury stock             (6,668,300)       (67)        (185,437)                  —                  —         (185,504)
      Net income                           —          —                —               355,703                 —          355,703     $   355,703
      Other comprehensive
        income (Note 12):
      Change in fair value of
        derivative
        instruments                       —           —                  —                   —             (7,650)          (7,650)         (7,650)
      Amounts reclassified
        to income statement
        related to derivatives            —           —                  —                   —            25,610            25,610         25,610
      Cumulative translation
        adjustment                        —           —                  —                   —            18,247            18,247         18,247
      Minimum pension
        liability adjustment              —           —                  —                   —           (11,522)          (11,522)       (11,522)
      Comprehensive
        income                                                                                                                        $   380,388
Balance, December 31, 2003        154,993,214      1,550        1,498,025            1,074,258           (31,020)       2,542,813
      Issuance of common
        stock                       3,539,783         35            86,437                   —                 —            86,472
      Horizon Organic stock
        option conversion                 —           —             20,635                   —                 —            20,635
      Purchase and
        retirement of
        treasury stock             (9,310,000)       (93)        (296,925)                  —                  —         (297,018)
      Net income                           —          —                —               285,374                 —          285,374     $   285,374
      Other comprehensive
        income (Note 12):
      Change in fair value of             —           —                  —                   —               (717)            (717)           (717)
        derivative

Source: DEAN FOODS CO, 10-K, March 16, 2005
        instruments
      Amounts reclassified
        to income statement
        related to derivatives           —             —               —              —          20,723          20,723         20,723
      Cumulative translation
        adjustment                       —             —               —              —          17,313          17,313         17,313
      Minimum pension
        liability adjustment             —             —               —              —          (14,458)       (14,458)       (14,458)
      Comprehensive
        income                                                                                                             $   308,235
Balance, December 31, 2004       149,222,997      $ 1,492   $   1,308,172    $ 1,359,632    $     (8,159)   $ 2,661,137


                                               See Notes to Consolidated Financial Statements.

                                                                    F-6




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents



                                                         DEAN FOODS COMPANY
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                               Year Ended December 31
                                                                                 2004                      2003             2002
                                                                                                    (In thousands)
Cash flows from operating activities:
    Net income                                                               $     285,374           $     355,703      $    175,416
    Income from discontinued operations                                                 —                       —               (879)
    Adjustments to reconcile net income to net cash provided by operating
      activities:
        Depreciation and amortization                                              223,547                 191,885           173,994
        (Gain) loss on disposition of assets                                         4,552                  (1,194)            4,586
        Gain on sale of operations                                                    (122)                (66,168)               —
        Equity in (earnings) loss of unconsolidated affiliates                          —                     (244)            7,899
        Loss on sale of discontinued operations                                         —                       —              8,231
        Cumulative effect of accounting change                                          —                       —             84,983
        Write-down of impaired assets                                               13,099                   8,757            11,253
        Deferred income taxes                                                      143,136                 143,267            75,605
        Tax savings on equity compensation                                          18,526                  26,380            13,923
        Costs related to early extinguishment of debt                               32,613                      —                 —
        Other                                                                          358                  (8,990)            2,839
        Changes in operating assets and liabilities, net of acquisitions:
              Receivables                                                          (83,456)                (67,565)           99,775
              Inventories                                                          (25,722)                (18,718)           18,167
              Prepaid expenses and other assets                                        436                  20,663              (943)
              Accounts payable and accrued expenses                                (74,711)                (89,367)          (51,193)
              Income taxes payable                                                  (9,974)                 27,893            18,961
                   Net cash provided by continuing operations                      527,656                 522,302           642,617
                   Net cash provided by discontinued operations                         —                       —             13,147
                   Net cash provided by operating activities                       527,656                 522,302           655,764
Cash flows from investing activities:
    Additions to property, plant and equipment                                    (356,136)               (291,662)         (241,982)
    Cash outflows for acquisitions and investments                                (401,148)               (246,573)         (222,149)
    Net proceeds from divestitures                                                      —                   89,950           148,313
    Proceeds from sale of fixed assets                                              10,713                  12,112             6,765
                   Net cash used in continuing operations                         (746,571)               (436,173)         (309,053)
                   Net cash used in discontinued operations                             —                       —             (5,138)
                   Net cash used in investing activities                          (746,571)               (436,173)         (314,191)
Cash flows from financing activities:
    Proceeds from issuance of debt                                                1,658,846                349,680           637,500
    Repayment of debt                                                            (1,220,629)              (322,691)         (992,797)
    Payments of deferred financing, debt restructuring and merger costs              (9,801)                (5,200)           (2,887)
    Issuance of common stock, net of expenses                                        67,946                 95,270            74,988
    Redemption of common stock                                                     (297,018)              (199,521)          (87,211)
    Redemption of trust issued preferred securities                                      —                  (2,420)               —
                   Net cash provided by (used in) financing activities              199,344                (84,882)         (370,407)
Increase (decrease) in cash and cash equivalents                                    (19,571)                 1,247           (28,834)
Cash and cash equivalents, beginning of period                                       47,143                 45,896            74,730
Cash and cash equivalents, end of period                                     $       27,572          $      47,143      $     45,896


                                              See Notes to Consolidated Financial Statements.

                                                                       F-7




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents



                                                     DEAN FOODS COMPANY
                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       Years Ended December 31, 2004, 2003 and 2002

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    Nature of Our Business — We are a leading food and beverage company. Our Dairy Group is the largest processor and distributor
of milk and various other dairy products in the United States. The Dairy Group sells its products under a variety of local and regional
brands. Our WhiteWave Foods Company (formerly the Branded Products Group) manufacturers, markets and sells a variety of
well-known soy, dairy and dairy-related nationally branded products including Silk® soymilk and cultured soy products, Horizon
Organic® fluid dairy, juices and other products, International Delight® coffee creamers and LAND O’LAKES® fluid dairy products.
Our Specialty Foods Group is the leading private label pickle processor in the United States and a maker of a variety of other food
products. We also own the fourth largest dairy processor in Spain.
    Basis of Presentation — Our Consolidated Financial Statements include the accounts of our wholly owned subsidiaries. All
intercompany balances and transactions are eliminated in consolidation.
    Use of Estimates — The preparation of our Consolidated Financial Statements in conformity with generally accepted accounting
principles (“GAAP”) requires us to use our judgment to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported
amounts of net sales and expenses during the reporting period. Actual results could differ from these estimates under different
assumptions or conditions.
   Cash Equivalents — We consider temporary cash investments with an original maturity of three months or less to be cash
equivalents.
     Inventories — Inventories are stated at the lower of cost or market. Dairy and certain specialty products are valued using the
first-in, first-out (“FIFO”) method while our pickle inventories are valued using the last-in, first-out (“LIFO”) method. The costs of
finished goods inventories include raw materials, direct labor and indirect production and overhead costs.
    Property, Plant and Equipment — Property, plant and equipment are stated at acquisition cost, plus capitalized interest on
borrowings during the actual construction period of major capital projects. Also included in property, plant and equipment are certain
direct costs related to the implementation of computer software for internal use. Depreciation and amortization are calculated using the
straight-line method over the estimated useful lives of the assets, as follows:
                                           Asset                                                                Useful Life
Buildings and improvements                                                                      7 to 40 years
Machinery and equipment                                                                         3 to 20 years

   We perform impairment tests when circumstances indicate that the carrying value may not be recoverable. Capitalized leases are
amortized over the shorter of their lease term or their estimated useful lives. Expenditures for repairs and maintenance, which do not
improve or extend the life of the assets, are expensed as incurred.

                                                                   F-8




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                     DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   Intangible and Other Assets — Identifiable intangible assets are amortized over their estimated useful lives as follows:
                          Asset                                                               Useful Life
Customer relationships                                       Straight-line method over 5 to 15 years
Customer supply contracts                                    Straight-line method over the terms of the agreements
Trademarks/trade names                                       Straight-line method over 5 to 40 years
Noncompetition agreements                                    Straight-line method over the terms of the agreements
Patents                                                      Straight-line method over 15 years
Deferred financing costs                                     Interest method over the terms of the related debt

    Effective January 1, 2002, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, goodwill and other
intangible assets determined to have indefinite useful lives are no longer amortized. Instead, we now conduct impairment tests on our
goodwill, trademarks and other intangible assets with indefinite lives annually and when circumstances indicate that the carrying value
may not be recoverable. To determine whether an impairment exists, we use present value techniques. Upon adoption of
SFAS No. 142, we conducted transitional impairment tests and recorded certain impairments during 2002. The results of these tests
indicated that the goodwill related to our Puerto Rico operations was impaired at January 1, 2002. In the fourth quarter of 2002, we
determined that the impairment that existed as of January 1, 2002 was $37.7 million (net of tax). As required by SFAS No. 142, we
recorded the impairment in our income statement as the cumulative effect of accounting change retroactive to the first quarter of 2002.
See Note 2 for information related to the sale of our Puerto Rico operations. We also completed an impairment assessment of our
intangibles with indefinite useful lives other than goodwill, upon adoption of SFAS No. 142, during the first quarter of 2002 as of
January 1, 2002. We determined that an impairment of $47.3 million (net of tax) existed at January 1, 2002. The impairment related to
certain trademarks in our Dairy Group and WhiteWave Foods Company segments, and was recorded in the first quarter as the
cumulative effect of an accounting change. The fair value of these trademarks was determined using a present value technique.
    Foreign Currency Translation — The financial statements of our foreign subsidiaries are translated to U.S. dollars in accordance
with the provisions of SFAS No. 52, “Foreign Currency Translation.” The functional currency of our foreign subsidiaries is generally
the local currency of the country. Accordingly, assets and liabilities of the foreign subsidiaries are translated to U.S. dollars at
year-end exchange rates. Income and expense items are translated at the average rates prevailing during the year. Changes in exchange
rates that affect cash flows and the related receivables or payables are recognized as transaction gains and losses in the determination
of net income. The cumulative translation adjustment in stockholders’ equity reflects the unrealized adjustments resulting from
translating the financial statements of our foreign subsidiaries.
    Minority Interest in Subsidiaries — Minority interest in results of operations of consolidated subsidiaries represents the minority
shareholders’ share of the income or loss of various consolidated subsidiaries. Equity in earnings/(losses) represents the proportional
share of the earnings or losses of these subsidiaries less any cash distributions made. At December 31, 2004 and 2003, there were no
outstanding minority interests.
    Stock-Based Compensation — We have elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock
Issued to Employees,” and related interpretations in accounting for our stock options. All options granted to date have been to
employees, officers and directors. No compensation expense has been recognized as the stock options were granted at exercise prices
that were at or above market value at the grant date. Compensation expense for grants of stock units (“SUs”) is recognized over the
vesting period. See Note 11 for more information about our stock option and SU programs. Had compensation expense been
determined for stock option grants using fair value methods provided for in SFAS No. 123, “Accounting for

                                                                   F-9




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                      DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stock-Based Compensation,” our pro forma net income and net income per common share would have been the amounts indicated
below:
                                                                                                Year Ended December 31
                                                                             2004                         2003                         2002
                                                                                            (In thousands, except share data)
Net income, as reported                                               $       285,374              $        355,703             $          175,416
Add: Stock-based compensation expense included in reported
  net income, net of tax                                                            3,628                      2,396                            —
Less: Stock-based compensation expense determined under fair
  value-based methods for all awards, net of tax                              (35,281)                      (36,614)                       (31,249)
Pro forma net income                                                  $       253,721              $        321,485             $          144,167
Net income per share:
Basic — as reported                                                   $              1.85          $            2.45            $             1.30
       — pro forma                                                                   1.64                       2.21                          1.07
Diluted — as reported                                                                1.78                       2.27                          1.21
        — pro forma                                                                  1.58                       2.06                          1.01
Stock option share data:
    Stock options granted during period                                      2,392,658                   3,508,667                     7,711,394
    Weighted average option fair value                                $           8.87             $         11.61              $           9.99
SU data:
    SUs granted during period                                                 475,750                       806,800                             —
    Weighted average unit fair value                                  $         31.59              $          25.06                             —

    The fair value of each stock option grant is calculated using the Black-Scholes option pricing model, with the following
assumptions:
                                                             2004                               2003                                2002
Expected volatility                                                   25%                         37 to 38%                               38%
Expected dividend yield                                                0%                                0%                                0%
Expected option term                                               5 years                           7 years                           7 years
Risk-free rate of return                                    2.98 to 3.81%                     3.03 to 4.00%                     4.09 to 4.87%

     Sales Recognition and Accounts Receivable — Sales are recognized when persuasive evidence of an arrangement exists, the price
is fixed or determinable, the product has been shipped to the customer and there is a reasonable assurance of collection of the sales
proceeds. In accordance with Emerging Issues Task Force (“EITF”) 01-09, “Accounting for Consideration Given by a Vendor to a
Customer,” sales are reduced by certain sales incentives, some of which are recorded by estimating expense based on our historical
experience. We provide credit terms to customers generally ranging up to 30 days, perform ongoing credit evaluation of our customers
and maintain allowances for potential credit losses based on historical experience. Estimated product returns, which have not been
material, are deducted from sales at the time of shipment.
    Income Taxes — All of our wholly owned U.S. operating subsidiaries are included in our consolidated tax return. In addition, our
proportional share of the operations of our former majority-owned subsidiaries and certain of our equity method affiliates, all of which
are organized as limited liability companies or limited partnerships, are included in our consolidated tax return. Our foreign
subsidiaries are required to file separate income tax returns in their local jurisdictions. Certain distributions from these subsidiaries are
subject to U.S. income taxes; however, available tax credits of these subsidiaries may reduce or eliminate these

                                                                    F-10




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                      DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

U.S. income tax liabilities. Other foreign earnings are expected to be reinvested indefinitely. At December 31, 2004, no provision had
been made for U.S. federal or state income tax on approximately $30.5 million of accumulated foreign earnings.
    Deferred income taxes are provided for temporary differences between amounts recorded in the Consolidated Financial Statements
and tax bases of assets and liabilities using current tax rates. Deferred tax assets, including the benefit of net operating loss
carry-forwards, are evaluated based on the guidelines for realization and are reduced by a valuation allowance if deemed necessary.
   Advertising Expense — Advertising expense is primarily comprised of media, agency and production expenses. Advertising
expenses are charged to income during the period incurred, except for expenses related to the development of a major commercial or
media campaign which are charged to income during the period in which the advertisement or campaign is first presented by the
media. Advertising expenses charged to income totaled $120 million in 2004, $108.3 million in 2003 and $91.1 million in 2002.
Additionally, prepaid advertising costs were $3.6 million and $368,000 at December 31, 2004 and 2003, respectively.
    Shipping and Handling Fees — Our shipping and handling costs are included in both cost of sales and selling and distribution
expense, depending on the nature of such costs. Shipping and handling costs included in cost of sales reflect inventory warehouse
costs, product loading and handling costs and costs associated with transporting finished products from our manufacturing facilities to
our own distribution warehouses. Shipping and handling costs included in selling and distribution expense consist primarily of route
delivery costs for both company-owned delivery routes and independent distributor routes, to the extent that such independent
distributors are paid a delivery fee and the cost of shipping products to customers through third party carriers. Shipping and handling
costs that were recorded as a component of selling and distribution expense were approximately $1.13 billion, $988.1 million and
$951.9 million during 2004, 2003 and 2002, respectively.
    Insurance Accruals — We retain selected levels of property and casualty risks, primarily related to employee health care, workers’
compensation claims and other casualty losses. Many of these potential losses are covered under conventional insurance programs
with third party carriers with high deductible limits. In other areas, we are self-insured with stop-loss coverages. Accrued liabilities for
incurred but not reported losses related to these retained risks are calculated based upon loss development factors which contemplate a
number of factors including claims history and expected trends. These loss development factors are developed by us in consultation
with external insurance brokers and actuaries.
    Facility Closing and Reorganization Costs — We have an on-going facility closing and reorganization strategy. We periodically
record facility closing and reorganization charges when we have identified a facility for closure or other reorganization opportunity,
developed a plan and notified the affected employees. Effective January 1, 2003, we record these charges in accordance with SFAS
No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” Facility closings initiated prior to January 1, 2003
continue to be accounted for under the old guidance.
    Comprehensive Income — We consider all changes in equity from transactions and other events and circumstances, except those
resulting from investments by owners and distributions to owners, to be comprehensive income.
    Stock Split — On June 9, 2003, we effected a three-for-two split of our common stock, and on April 23, 2002, we effected a
two-for-one stock split. All share numbers contained in our Consolidated Financial Statements and in these Notes have been adjusted
for all periods to reflect the stock splits.
    Recently Adopted Accounting Pronouncements — In December 2003, the Financial Accounting Standards Board (“FASB”) issued
SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits” in an attempt to improve
financial statement disclosures regarding defined

                                                                   F-11




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                      DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

benefit plans. This standard requires that companies provide more details about their plan assets, benefit obligations, cash flows,
benefit costs and other relevant information. In addition to expanded annual disclosures, we are required to report the various elements
of pension and other postretirement benefit costs on a quarterly basis. SFAS No. 132 (revised 2003) is effective for fiscal years ending
after December 15, 2003, and for quarters beginning after December 15, 2003. The expanded disclosure requirements are included in
this report.
    On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was signed into
law. The Act introduces a prescription drug benefit under Medicare Part D, as well as a federal subsidy to sponsors of retiree health
care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In April 2004, the FASB issued Staff
Position (“FSP”) No. SFAS 106-2 to address the accounting and disclosure requirements related to the Act. The FSP is effective for
interim or annual periods beginning after September 15, 2004. Substantially all of our postretirement benefits terminate at age 65.
Therefore, the FSP will have no material affect on our Consolidated Financial Statements.
    Recently Issued Accounting Pronouncements — The FASB issued SFAS No.123(R), “Share-Based Payment” in December 2004.
It will require the cost of employee compensation paid with equity instruments to be measured based on grant-date fair values. That
cost will be recognized over the vesting period. SFAS No. 123(R) will become effective for us in the third quarter 2005. We are still
evaluating the impact of SFAS No. 123(R) on our Consolidated Financial Statements and have not yet determined the transition
method we will apply when we adopt the statement. Refer to the section “Stock-Based Compensation” in this Note for an illustration
of the pro-forma impact of expensing our stock options in the historical periods.
    In November 2004, the FASB issued SFAS No. 151, “Inventory Costs — an Amendment of ARB No. 43, Chapter 4.”
SFAS No. 151, which is effective for inventory costs incurred during years beginning after June 15, 2005, clarifies the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted material, requiring that those items be recognized as
current-period charges. In addition, SFAS No. 151 requires that allocation of fixed production overheads be based on the normal
capacity of the production facilities. We do not believe the adoption of this standard will have a material impact on our Consolidated
Financial Statements.
    In December 2004, FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29.”
SFAS No. 153 is effective for nonmonetary exchanges occurring in years beginning after June 15, 2005. SFAS No. 153 eliminates the
rule in APB No. 29 which excluded from fair value measurement exchanges of similar productive assets. Instead SFAS No. 153
excludes from fair value measurement exchanges of nonmonetary assets that do not have commercial substance. We do not believe the
adoption of this standard will have a material impact on our Consolidated Financial Statements.
    Reclassifications — Certain reclassifications have been made to conform the prior years’ Consolidated Financial Statements to the
current year classifications.

2.    ACQUISITIONS, DIVESTITURES AND DISCONTINUED OPERATIONS
     General
    We completed the acquisitions of 24 businesses during 2004, 2003 and 2002. All of these acquisitions were funded with cash
flows from operations and borrowings under our credit facility and our accounts receivables-backed facility.

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                                                      DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   All acquisitions were accounted for using the purchase method of accounting as of their respective acquisition dates, and
accordingly, only the results of operations of the acquired companies subsequent to their respective acquisition dates are included in
our Consolidated Financial Statements. At the acquisition date, the purchase price was allocated to assets acquired, including
identifiable intangibles, and liabilities assumed based on their fair market values. The excess of the total purchase prices over the fair
values of the net assets acquired represented goodwill. In connection with the acquisitions, assets were acquired and liabilities were
assumed as follows:
                                                                                              Year Ended December 31
                                                                                  2004                  2003                2002
                                                                                                   (In thousands)
Purchase prices:
    Cash paid, net of cash acquired                                          $     401,148        $    246,573         $     206,307(1)
    Cash acquired in acquisitions                                                    2,539                 171                17,870
            Total purchase prices                                                  403,687             246,744               224,177
Fair value of net assets acquired:
    Assets acquired                                                                260,723             102,709               147,650
    Liabilities assumed                                                           (163,270)            (28,771)              (29,172)
    Total fair value of net assets acquired                                         97,453              73,938               118,478
Goodwill                                                                     $     306,234        $    172,806         $     105,699


(1) An additional $15.8 million was paid as part of the acquisition of the former Dean Foods Company (“Legacy Dean”).
    We have not completed the final allocation of purchase price to the fair values of assets and liabilities acquired in 2004, or the
related business integration plans. We expect that the ultimate purchase price allocation may include additional adjustments to the fair
values of depreciable tangible assets, identifiable intangible assets and the carrying values of certain liabilities. Accordingly, to the
extent that such assessments indicate the fair value of the assets and liabilities differ from their preliminary purchase price allocation,
such difference would adjust the amounts allocated to the assets and liabilities and would change the amounts allocated to goodwill.

    2004 Acquisitions
    Milk Products of Alabama — On October 15, 2004 our Dairy Group acquired Milk Products of Alabama, a dairy manufacturer
based in Decatur, Alabama. Milk Products of Alabama had net sales of approximately $34 million in 2003. As a result of this
acquisition, we have expanded our production capabilities in the southeastern United States, allowing us to better serve our customers.
Milk Products of Alabama’s results of operations are now included in the Morningstar division of our Dairy Group. We paid
approximately $23.2 million for the purchase of Milk Products of Alabama, including costs of acquisition, and funded the purchase
price with borrowings under our senior credit facility.
    Tiger Foods — On May 31, 2004, Leche Celta, our Spanish subsidiary, acquired Tiger Foods, a dairy processing business with
one facility located in Avila, Spain. Tiger Foods, which had net sales of approximately $29 million in 2003, manufactures and
distributes branded and private label UHT milk and dairy-based drinks throughout Spain, with an emphasis in the southern and central
regions. Tiger Foods’ operations complement our Spanish operations and we expect this acquisition to allow us to reduce our
transportation costs for raw milk and finished products due to their geographic proximity to our raw milk suppliers and certain
customers. We paid approximately $21.9 million for the purchase of the company, all of which was funded with borrowings under our
senior credit facility.

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                                                     DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

    Soy Processing Facility — On April 5, 2004, our WhiteWave Foods Company acquired a soy processing and packaging plant
located in Bridgeton, New Jersey. Prior to the acquisition, the previous owner of the facility co-packed Silk products for us at the
facility. As a result of the acquisition, we have increased our in-house processing and packaging capabilities for our soy products,
resulting in cost reductions. We paid approximately $25.7 million for the purchase of the facility, all of which was funded using
borrowings under our senior credit facility.
    LAND O’LAKES East — In 2002, we purchased a perpetual license to use the LAND O’LAKES® brand on certain dairy products
nationally, excluding cheese and butter. This perpetual license was subject, however, to a pre-existing sublicense entitling a
competitor to manufacture and sell cream, sour cream and whipping cream in certain channels in the eastern United States. Effective
March 31, 2004, WhiteWave Foods Company acquired that sublicense and certain customer relationships of the sublicensee (“LAND
O’LAKES East”) for an aggregate purchase price of approximately $17 million, all of which was funded using borrowings under our
senior credit facility. We now have the exclusive right to use the LAND O’LAKES brand on certain dairy products (other than cheese
and butter) throughout the entire United States.
    Ross Swiss Dairies — On January 26, 2004, our Dairy Group acquired Ross Swiss Dairies, a dairy distributor based in Los
Angeles, California, which had net sales of approximately $120 million in 2003. As a result of this acquisition, we have increased the
distribution capability of our Dairy Group in southern California, allowing us to better serve our customers. Ross Swiss Dairies has
historically purchased a significant portion of its products from other processors. Now the majority of products distributed by Ross
Swiss Dairies are manufactured in our southern California facilities. We paid approximately $21.8 million, including transaction costs,
for the purchase of Ross Swiss Dairies and funded the purchase price with borrowings under our receivables-backed facility.
    Horizon Organic — On January 2, 2004, we completed the acquisition of the 87% of Horizon Organic Holding Corporation
(“Horizon Organic”) that we did not already own. Horizon Organic had sales of over $200 million during 2003. We already owned
approximately 13% of the outstanding common stock of Horizon Organic as a result of investments made in 1998. Third-party
co-packers, including us, have historically done all of Horizon Organic’s manufacturing. During 2003, we produced approximately
27% of Horizon Organic’s fluid dairy products. We also distributed Horizon Organic’s products in several parts of the country.
Horizon Organic is a leading branded organic foods company in the United States. Because organic foods are gaining popularity with
consumers and because Horizon Organic’s products offer consumers an alternative to our Dairy Group’s traditional dairy products, we
believe Horizon Organic is an important addition to our portfolio of brands. The aggregate purchase price for the 87% of Horizon
Organic that we did not already own was approximately $287 million, including approximately $217 million of cash paid to Horizon
Organic’s stockholders, the repayment of approximately $40 million of borrowings under Horizon Organic’s former credit facilities,
and transaction expenses of approximately $9 million, all of which was funded using borrowings under our senior credit facility and
our receivables-backed facility. In addition, each of the options to purchase Horizon Organic’s common stock outstanding on
January 2, 2004 was converted into an option to purchase .7301 shares of our stock, with an aggregate fair value of approximately
$21 million. Beginning with the first quarter of 2004, Horizon Organic’s financial results are reported in our WhiteWave Foods
Company segment.
   Other — During 2004, our Dairy Group and Specialty Foods Group completed several smaller acquisitions for an aggregate
purchase price of $23.3 million and $1.1 million, respectively.

    2003 Acquisitions
   Cremora — On December 24, 2003, our Specialty Foods Group acquired the Cremora® branded non-dairy powdered creamer
business from Eagle Family Foods. Prior to the acquisition, we had been producing Cremora creamers for Eagle Family Foods
pursuant to a co-packing arrangement, which generated

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                                                     DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

approximately $8.9 million of net sales for us in 2003. Cremora is the first branded powdered coffee creamer offering for Specialty
Foods. The Cremora brand had sales of approximately $15.8 million in the twelve months ended June 30, 2003. We purchased the
Cremora business for a purchase price of approximately $12.6 million, all of which was funded using borrowings under our senior
credit facility.
    Kohler Mix — On October 15, 2003, we acquired Kohler Mix Specialties, Inc., the dairy products division of Michael Foods, Inc.
Kohler’s product line consists primarily of private label ultra-pasteurized ice cream mixes, creamers and creams, sold primarily in the
foodservice channel. Kohler is included in the Morningstar division of our Dairy Group segment. The acquisition of Kohler increased
the Dairy Group’s ultra-high temperature processing capacity, which we needed to meet the expanding needs of our WhiteWave
Foods Company segment. Kohler had net sales of approximately $187.5 million for the 12 months ended August 31, 2003 and has
three facilities located in White Bear Lake, Minnesota, Sulphur Springs, Texas and Newington, Connecticut. We paid approximately
$158.6 million for the purchase of Kohler, all of which was funded using borrowings under our receivables-backed facility.
    Melody Farms — On June 9, 2003, our Dairy Group acquired Melody Farms, LLC. Melody Farms, which is now a part of the
Midwest region of our Dairy Group, is a regional dairy processor based in Livonia, Michigan, that produces fluid dairy and ice cream
products from two facilities in Michigan. Our acquisition of Melody Farms expanded our distribution reach and allows us to better
serve our customers in the Michigan area. Melody Farms had net sales of approximately $116 million during the 12 months ended
March 31, 2003. We paid approximately $52.7 million for Melody Farms, all of which was funded using borrowings under our
receivables-backed facility.
   Other — During 2003, our Dairy Group completed several small acquisitions for an aggregate purchase price of $22.6 million.

    2002 Acquisitions
   Marie’s — On May 17, 2002, we bought the assets of Marie’s Quality Foods, Marie’s Dressings, Inc. and Marie’s Associates,
makers of Marie’s® brand dips and dressings in the western United States, for an aggregate purchase price of approximately
$23.5 million. Prior to the acquisition, we licensed the Marie’s brand to Marie’s Quality Foods and Marie’s Dressings, Inc. for use in
connection with the manufacture and sale of dips and dressings in the western United States. As a result of this acquisition, our
WhiteWave Foods Company segment is now the sole owner, manufacturer and marketer of Marie’s brand products nationwide.
    White Wave, Inc. (White Wave) — On May 9, 2002, we acquired the 64% equity interest in White Wave that we did not already
own. White Wave, based in Boulder, Colorado, is the maker of Silk soymilk and other soy-based products, and had sales of
approximately $125 million during the 12 months ended March 31, 2002. Prior to May 9, 2002, we owned approximately 36% of
White Wave, as a result of certain investments made by Legacy Dean beginning in 1999. We decided to purchase the remaining 64%
equity interest, for a total price of approximately $192.8 million because of the success that Silk had experienced in the refrigerated
soymilk category and we believed it was important that we have a successful branded soymilk offering in order to better serve our
customers and consumers.
   Other — In 2002 our Dairy Group made two smaller acquisitions for an aggregate purchase price of $8 million.

    Divestitures
    In order to more closely align both our assets and our management resources with our strategic direction, part of our strategy is to
divest certain non-core assets. On July 31, 2003, we completed the sale of our frozen pre-whipped topping and frozen coffee creamer
operations. We recorded a pre-tax gain on the sale of approximately $66.2 million. Also in July 2003, we sold certain Dairy Group
delivery trucks and customer

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Table of Contents

                                                    DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

relationships in New York. The proceeds from the sale of businesses during 2003 were approximately $90 million. During 2002, we
completed the sale of the following non-core businesses acquired as part of Legacy Dean’s Specialty Foods division: on January 4,
2002, we completed the sale of the stock of DFC Transportation Company, a contract hauler; on February 7, 2002, we completed the
sale of the assets related to a boiled peanut business; and on October 11, 2002, we completed the sale of EBI Foods Limited, a
U.K.-based manufacturer of powdered food coatings. Net proceeds from the sale of these three businesses totaled approximately
$28.9 million. No gain or loss was recorded on the divestiture of Legacy Dean’s businesses during 2002 because the sales prices
equaled the carrying values.

     Discontinued Operations
    On December 30, 2002, we sold our operations in Puerto Rico for a net price of approximately $119.4 million. Our financial
statements were restated in 2002 to reflect our former Puerto Rico business as a discontinued operation.
     Net sales and income before taxes generated by our Puerto Rico operations were as follows:
                                                                                                              Year Ended
                                                                                                             December 31
                                                                                                                2002(1)
                                                                                                            (In thousands)
Net sales                                                                                               $            221,908
Income before tax(2)                                                                                                   1,762


(1) All intercompany sales and expenses have been appropriately eliminated in the table.
(2) Corporate interest expense of $5.5 million in 2002 was allocated to our Puerto Rico operations based on the ratio of our
    investment in Puerto Rico to total debt and equity.
    In the first quarter of 2002, we recognized an impairment charge of $37.7 million related to the goodwill of our Puerto Rico
operations in accordance with our implementation of SFAS No. 142 “Goodwill and Other Intangible Assets.” This loss is reflected as
a cumulative change in accounting principle in our Consolidated Financial Statements.

3.    INVESTMENTS IN UNCONSOLIDATED AFFILIATES
   Investment in Consolidated Container Company — We own an approximately 27% minority interest, on a fully diluted basis, in
Consolidated Container Company (“CCC”), one of the nation’s largest manufacturers of rigid plastic containers and our largest
supplier of plastic bottles and bottle components. We have owned our minority interest since July 2, 1999 when we sold our
U.S. plastic packaging operations to CCC.
    Since July 2, 1999, our investment in CCC has been accounted for under the equity method of accounting. During 2001, due to a
variety of operational difficulties, CCC consistently reported operating results that were significantly weaker than expected, which
resulted in significant losses in the third and fourth quarters of 2001. As a result, by late 2001 CCC had become unable to comply with
the financial covenants contained in its credit facility. We concluded that our investment was impaired and that the impairment was
not temporary so we wrote off our remaining investment during the fourth quarter of 2001.
    In February 2002, CCC’s lenders agreed to restructure CCC’s credit agreement to modify the financial covenants, subject to the
agreement of CCC’s primary shareholders to guarantee certain of CCC’s indebtedness. Because CCC is an important and valued
supplier of ours, and in order to protect our interest in CCC, we agreed to provide a limited guarantee of up to $10 million of CCC’s
revolving credit indebtedness. By late 2002, CCC was again unable to comply with the terms of its credit agreement. CCC’s lenders
agreed to again restructure CCC’s credit agreement, subject to the agreement of CCC’s primary shareholders to

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Table of Contents

                                                    DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

provide a total of $35 million of additional debt financing to CCC. In the fourth quarter of 2002, we agreed to loan CCC $10 million
of the $35 million in additional financing, in exchange for cancellation of our pre-existing $10 million guaranty and the receipt of
additional equity. Vestar Capital Partners, majority owner of CCC, loaned CCC the remaining $25 million. Our loan to CCC is due on
December 31, 2007 (or upon the earlier payment in full of CCC’s senior debt) and is secured by a subordinate lien on certain of
CCC’s assets. The loan is not scheduled to be repaid until after CCC’s senior debt has been paid. Therefore, our right to enforce
payment of the loan is limited prior to payment in full of CCC’s senior debt. The loan bears interest at the prime rate plus 2.25%, or
the eurodollar rate plus 3.25%, at CCC’s option. Upon maturity of the loan, we will be entitled to receive a $400,000 fee, plus an
additional fee in respect of the unpaid principal amount of the loan from January 10, 2003 to the maturity date of the loan, computed at
an annual rate of 11.3%. Under GAAP, we were required to recognize a portion of CCC’s 2002 losses, up to the amount of the loan.
The loan was written off in its entirety in the fourth quarter of 2002. Our investment in CCC was recorded at $0 at December 31, 2004
and 2003.
    Less than 1% of CCC is owned indirectly by Alan Bernon, a member of our Board of Directors, and his brother Peter Bernon.
Pursuant to our agreements with Vestar, we control two of the seven seats on CCC’s Management Committee. We have long-term
supply agreements with CCC to purchase certain of our requirements for plastic bottles and bottle components from CCC. We spent
approximately $235.5 million, $167.9 million and $128.7 million on products purchased from CCC for the years ended December 31,
2004, 2003 and 2002, respectively. In the fourth quarter of 2004, we purchased equipment previously owned and operated by CCC
totaling $3.2 million.
    Investment in Horizon Organic — At December 31, 2003, we had an approximately 13% interest in Horizon Organic. We
accounted for this investment under the equity method of accounting. On January 2, 2004, we acquired the 87% of Horizon Organic
that we did not already own and began consolidating Horizon Organic’s results with our financial results. Our investment in Horizon
Organic at December 31, 2003 was recorded at $16.6 million, and our equity in earnings included in our consolidated statement of
income for 2003 and 2002 was income of $244,000 and a loss of $69,000, respectively.
    Investment in Momentx — As of December 31, 2004 and 2003, we had an approximately 16% interest in Momentx, Inc. Our
investment in Momentx at both December 31, 2004 and 2003 was $1.2 million. Momentx is the owner and operator of dairy.com, an
online vertical exchange dedicated to the dairy industry. We account for this investment under the cost method of accounting. We
spent approximately $664,000, $636,000 and $147,000 on products purchased from dairy.com for the years ended December 31,
2004, 2003 and 2002, respectively.

4.   INVENTORIES
                                                                                                           December 31
                                                                                                   2004                    2003
                                                                                                          (In thousands)
Raw materials and supplies                                                                    $      192,796          $    165,206
Finished goods                                                                                       287,185               261,272
    Total                                                                                     $      479,981          $    426,478


    Approximately $88.2 million and $97.6 million of our inventory was accounted for under the LIFO method of accounting at
December 31, 2004 and 2003, respectively. Our LIFO reserve was $4 million and $1.4 million at December 31, 2004 and 2003,
respectively.

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Table of Contents

                                                      DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


5.    PROPERTY, PLANT AND EQUIPMENT
                                                                                                           December 31
                                                                                             2004                            2003
                                                                                                        (In thousands)
Land                                                                                  $            165,531           $         153,257
Buildings and improvements                                                                         728,278                     642,468
Machinery and equipment                                                                          1,858,879                   1,616,100
                                                                                                 2,752,688                   2,411,825
Less accumulated depreciation                                                                     (805,696)                   (638,270)
     Total                                                                            $          1,946,992           $       1,773,555


   For both 2004 and 2003, we capitalized $3.4 million in interest related to borrowings during the actual construction period of
major capital projects, which is included as part of the cost of the related asset.

6.    INTANGIBLE ASSETS
     The changes in the carrying amount of goodwill for the years ended December 31, 2004 and 2003 are as follows:
                                                               WhiteWave
                                                                Foods                Specialty
                                            Dairy Group        Company            Foods Group               Other              Total
                                                                               (In thousands)
Balance at December 31, 2002            $      2,264,093      $    395,948       $    304,290          $  71,086         $     3,035,417
Purchase accounting adjustments                  (19,035)           (5,679)                —                  —                  (24,714)
Acquisitions                                     165,306                —               7,500                 —                  172,806
Currency changes and other                            —                 —                  —              14,039                  14,039
Balance at December 31, 2003                   2,410,364           390,269            311,790             85,125               3,197,548
Purchase accounting adjustments                  (16,788)              (23)            (5,317)                —                  (22,128)
Acquisitions                                      49,392           244,436                 —              12,406                 306,234
Currency changes and other                            —                 —                  —               8,475                   8,475
Balance at December 31, 2004            $      2,442,968      $    634,682       $    306,473          $ 106,006         $     3,490,129

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                                                       DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   The gross carrying amount and accumulated amortization of our intangible assets other than goodwill as of December 31, 2004
and 2003 are as follows:
                                                                                  December 31
                                                        2004                                                  2003
                                     Gross                                   Net              Gross                             Net
                                    Carrying        Accumulated            Carrying          Carrying    Accumulated          Carrying
                                    Amount          Amortization           Amount            Amount      Amortization         Amount
                                                                                 (In thousands)
Intangible assets with
  indefinite lives:
       Trademarks                 $ 583,402        $     (14,274)      $ 569,128          $ 485,358     $     (14,274)      $ 471,084
Intangible assets with finite
  lives:
       Customer-related              98,842              (18,886)         79,956             50,850           (12,187)         38,663
Total other intangibles           $ 682,244        $     (33,160)      $ 649,084          $ 536,208     $     (26,461)      $ 509,747


   In the fourth quarter of 2004, we substantially completed the purchase price allocation related to our acquisition of Horizon
Organic, and the preliminary amounts initially allocated to trademarks and customer related intangible assets were adjusted
accordingly. In addition, goodwill was adjusted for changes in estimated exit costs under contractual obligations entered into by
Horizon Organic prior to our acquisition of them in January 2004.
   Amortization expense on intangible assets for the years ended December 31, 2004, 2003 and 2002 was $6.9 million, $5.5 million
and $7.8 million, respectively. Estimated aggregate intangible asset amortization expense for the next five years is as follows:
2005                                                                                                                          $8.3 million
2006                                                                                                                           8.1 million
2007                                                                                                                           7.9 million
2008                                                                                                                           7.8 million
2009                                                                                                                           7.6 million

    Our goodwill and intangible assets have resulted primarily from acquisitions. Upon acquisition, the purchase price is first allocated
to identifiable assets and liabilities, including trademarks and customer-related intangible assets, with any remaining purchase price
recorded as goodwill. Goodwill and trademarks with indefinite lives are not amortized.
    A trademark is recorded with an indefinite life if it has sufficient market share and a history of strong sales and cash flow
performance that we expect to continue for the foreseeable future. If these perpetual trademark criteria are not met, the trademarks are
amortized over their expected useful lives, which range from five to 40 years. Determining the expected life of a trademark is based on
a number of factors including the competitive environment, market share, trademark history and anticipated future trademark support.
    In accordance with SFAS No. 142, we conduct impairment tests of goodwill and intangible assets with indefinite lives annually in
the fourth quarter or when circumstances arise that indicate a possible impairment might exist. If the fair value of an evaluated asset is
less than its book value, the asset is written down to fair value based on its discounted future cash flows. Our 2004 annual impairment
tests of both goodwill and intangibles with indefinite lives indicated no impairments. Our annual impairment test of goodwill
conducted

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Table of Contents

                                                      DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

in the fourth quarter of 2003 indicated no impairment of goodwill; as a result of the tests on intangibles with indefinite lives an
impairment of $2.3 million was recorded for a trademark that we were no longer using.
    Amortizable intangible assets are only evaluated for impairment upon a significant change in the operating environment. If an
evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on
discounted future cash flows.

7.    ACCOUNTS PAYABLE AND ACCRUED EXPENSES
                                                                                                                December 31
                                                                                                         2004                        2003
                                                                                                                (In thousands)
Accounts payable                                                                                 $        577,629           $        517,852
Payroll and benefits                                                                                      120,485                    161,700
Health insurance, workers’ compensation and other insurance costs                                          62,705                     51,720
Other accrued liabilities                                                                                 164,380                    193,435
    Total                                                                                        $        925,199           $        924,707


8.    INCOME TAXES
     The following table presents the 2004, 2003 and 2002 provisions for income taxes.
                                                                                                Year Ended December 31
                                                                                    2004                  2003                       2002(1)
                                                                                                     (In thousands)
Current taxes payable:
   Federal                                                                     $     23,590          $       55,652              $     47,618
   State                                                                              5,066                  14,533                     7,829
   Foreign and other                                                                  2,925                   4,401                     3,238
   Deferred income taxes                                                            145,421                 143,267                    94,303
       Total                                                                   $    177,002          $      217,853              $    152,988


(1) Excludes an $883,000 income tax expense related to discontinued operations and a $29 million income benefit related to a
    cumulative effect of accounting change.
   The following is a reconciliation of income taxes computed at the U.S. federal statutory tax rate to the income taxes reported in the
consolidated statements of income:
                                                                                                Year Ended December 31
                                                                                   2004                   2003                        2002
                                                                                                     (In thousands)
Tax expense at statutory rates                                                 $    161,832          $      200,746              $    147,274
State income taxes                                                                   11,383                  11,732                    16,320
Change in valuation allowance                                                         1,208                   7,493                     4,527
Favorable tax settlement                                                                 —                       —                    (10,076)
Other                                                                                 2,579                  (2,118)                   (5,057)
    Total                                                                      $    177,002          $      217,853              $    152,988

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Table of Contents

                                                      DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   The tax effects of temporary differences giving rise to deferred income tax assets and liabilities were:
                                                                                                              December 31
                                                                                                      2004                    2003
                                                                                                             (In thousands)
Deferred income tax assets:
    Net operating loss carry-forwards                                                            $      14,430            $     11,402
    Asset valuation reserves                                                                            13,568                  17,096
    Accrued liabilities                                                                                189,971                 157,268
    State and foreign tax credits                                                                        9,670                   8,389
    Derivative instruments                                                                               2,498                  13,593
    Other                                                                                               (8,034)                  1,404
    Valuation allowances                                                                               (14,765)                (13,557)
                                                                                                       207,338                 195,595
Deferred income tax liabilities:
    Depreciation and amortization                                                                     (564,615)               (428,624)
    Basis differences in unconsolidated affiliates                                                     (23,814)                (18,067)
                                                                                                      (588,429)               (446,691)
             Net deferred income tax liability                                                   $    (381,091)           $   (251,096)


   These net deferred income tax assets (liabilities) are classified in our consolidated balance sheets as follows:
                                                                                                             December 31
                                                                                                     2004                     2003
                                                                                                             (In thousands)
Current assets                                                                               $        150,151            $     137,055
Noncurrent liabilities                                                                               (531,242)                (388,151)
   Total                                                                                     $       (381,091)           $    (251,096)


    At December 31, 2004, we had approximately $4.4 million of federal tax credits available for carryover to future years. The losses
are subject to certain limitations and will expire beginning in 2010.
    A valuation allowance of $14.8 million has been established because we believe it is more likely than not that all of the deferred
tax assets relating to state net operating loss and credit carryovers, foreign tax credit carryovers and capital loss carryovers will not be
realized prior to the date they are scheduled to expire.

                                                                    F-21




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                        DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


9.    LONG-TERM DEBT
                                                                                         December 31
                                                                        2004                                          2003
                                                         Amount                Interest                 Amount                 Interest
                                                        Outstanding             Rate                   Outstanding              Rate
                                                                                     (Dollars in thousands)
Senior credit facility                              $      2,031,100                  3.72%        $     1,784,053                    3.05%
Subsidiary debt obligations:
   Senior notes                                              664,696            6.625-8.15                 660,663             6.625-8.15
   Receivables-backed facility                               500,000                  2.83                 302,500                   1.84
   Other lines of credit                                      30,750                  2.64                   6,401                   2.76
   Industrial development revenue bonds                           —                                         11,700              1.35-1.40
   Capital lease obligations and other                        30,713                                        26,197
                                                           3,257,259                                     2,791,514
Less current portion                                        (141,227)                                     (180,158)
           Total                                    $      3,116,032                               $     2,611,356


     The scheduled maturities of long-term debt, at December 31, 2004, were as follows (in thousands):
2005                                                                                                                  $        141,918
2006                                                                                                                            65,786
2007                                                                                                                           978,707
2008                                                                                                                           432,710
2009                                                                                                                         1,519,031
Thereafter                                                                                                                     154,581
      Subtotal                                                                                                               3,292,733
      Less discounts                                                                                                           (35,474)
      Total outstanding debt                                                                                          $      3,257,259


    Senior Credit Facility — Our senior credit facility provides for a $1.5 billion revolving credit facility and a $1.5 billion term loan.
At December 31, 2004 there were outstanding term loan borrowings of $1.5 billion under the senior credit facility, and $531.1 million
outstanding under the revolving line of credit. Letters of credit in the aggregate amount of $129.3 million were issued but undrawn. At
December 31, 2004, approximately $839.6 million was available for future borrowings under the revolving credit facility, subject to
satisfaction of certain ordinary course conditions contained in the credit agreement.
    Both the revolving credit facility and term loan bear interest, at our election, at the base rate plus a margin that varies from 0 to
62.5 basis points depending on our credit ratings (as issued by Standard & Poor’s and Moody’s), or LIBOR plus a margin that varies
from 75 to 187.5 basis points, depending on our credit ratings (as issued by Standard & Poor’s and Moody’s). The blended interest
rate in effect on borrowings under the senior credit facility, including the applicable interest rate margin, was 3.72% at December 31,
2004. However, we had interest rate swap agreements in place that hedged $775 million of our borrowings under the senior credit
facility at an average rate of 4.96%, plus the applicable interest rate margin. Interest is payable quarterly or at the end of the applicable
interest period.
     Principal payments are required on the term loan as follows:
     • $56.25 million quarterly beginning on December 31, 2006 through September 30, 2008;

                                                                      F-22




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                      DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

    • $262.5 million quarterly beginning on December 31, 2008 through June 30, 2009; and
    • A final payment of $262.5 million on the maturity date of August 13, 2009.
   No principal payments are due on the $1.5 billion revolving credit facility until maturity on August 13, 2009.
   The credit agreement also requires mandatory principal prepayments upon the occurrence of certain asset dispositions or recovery
events.
    In consideration for the revolving commitment, we pay a quarterly commitment fee on unused amounts of the revolving credit
facility that ranges from 25 to 37.5 basis points, depending on our credit ratings (as issued by Standard & Poor’s and Moody’s).
    The senior credit facility contains various financial and other restrictive covenants and requires that we maintain certain financial
ratios, including a leverage and interest coverage ratio. We are currently in compliance with all covenants contained in our credit
agreement.
    Our credit agreement permits us to complete acquisitions that meet the following conditions without obtaining prior approval:
(1) the acquired company is involved in the manufacture, processing and distribution of food or packaging products or any other line
of business in which we are currently engaged, (2) the net cash purchase price is not greater than $500 million, (3) we acquire at least
51% of the acquired entity, (4) the transaction is approved by the Board of Directors or shareholders, as appropriate, of the target and
(5) after giving effect to such acquisition on a pro-forma basis, we are in compliance with all financial covenants. All other
acquisitions must be approved in advance by the required lenders.
    The senior credit facility also contains limitations on liens, investments and the incurrence of additional indebtedness, and
prohibits certain dispositions of property and restricts certain payments, including dividends. The senior credit facility is secured by
liens on substantially all of our domestic assets (including the assets of our subsidiaries, but excluding the capital stock of Legacy
Dean’s subsidiaries, and the real property owned by Legacy Dean and its subsidiaries).
    The credit agreement contains standard default triggers, including without limitation: failure to maintain compliance with the
financial and other covenants contained in the credit agreement, default on certain of our other debt, a change in control and certain
other material adverse changes in our business. The credit agreement does not contain any default triggers based on our credit rating.
    In August 2004, we amended our senior credit facility to (1) increase the size of our revolving credit facility from $1 billion to
$1.5 billion, (2) increase the size of our term loan A from $850 million to $1.5 billion, (3) eliminate term loans B and C and
(4) modify the interest rate and payment terms. When we amended our credit facility, we were required to write-off approximately
$32.6 million of deferred financing costs that were incurred in connection with our credit facility prior to the amendment. These costs
were being amortized over the previous terms of the revolving credit facility and term loans.
    Senior Notes — Legacy Dean had certain senior notes outstanding at the time of the acquisition which remain outstanding. The
notes carry the following interest rates and maturities:
    • $99.3 million ($100 million face value), at 6.75% interest, maturing in June 2005;
    • $250.3 million ($250 million face value), at 8.15% interest, maturing in 2007;
    • $188 million ($200 million face value), at 6.625% interest, maturing in 2009; and
    • $127.1 million ($150 million face value), at 6.9% interest, maturing in 2017.

                                                                   F-23




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                      DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   The related indentures do not contain financial covenants but they do contain certain restrictions including a prohibition against
Legacy Dean and its subsidiaries granting liens on certain of their real property interests and a prohibition against Legacy Dean
granting liens on the stock of its subsidiaries.
    Receivables-Backed Facility — We have entered into a $500 million receivables securitization facility pursuant to which certain of
our subsidiaries sell their accounts receivable to four wholly-owned special purpose entities intended to be bankruptcy-remote. The
special purpose entities then transfer the receivables to third party asset-backed commercial paper conduits sponsored by major
financial institutions. The assets and liabilities of these four special purpose entities are fully reflected on our balance sheet, and the
securitization is treated as a borrowing for accounting purposes. During 2004, we made net borrowings of $197.5 million on this
facility leaving an outstanding balance of $500 million at December 31, 2004. The receivables-backed facility bears interest at a
variable rate based on the commercial paper yield as defined in the agreement. The average interest rate on this facility was 2.83% at
December 31, 2004. Our ability to re-borrow under this facility is subject to a standard “borrowing base” formula. At December 31,
2004 there was no remaining availability under this facility. In January 2005, we amended our receivables-backed loan to increase the
facility to $600 million. See Note 23.
    Other Lines of Credit — Leche Celta, our Spanish subsidiary, is our only subsidiary with its own lines of credit separate from the
credit facility described above. Leche Celta utilizes local commercial lines of credit and receivables factoring facility. At
December 31, 2004, a total of $30.75 million was outstanding on these facilities at an average interest rate of 2.64%.
   Industrial Development Revenue Bonds — Certain of our subsidiaries had revenue bonds outstanding in 2003 and 2004. These
bonds were secured by irrevocable letters of credit issued by financial institutions, along with first mortgages on the related real
property and equipment. In December 2003, we made payments of $9 million, leaving an outstanding balance of $11.7 million at
December 31, 2003. During 2004, we repaid the remaining principal balance on these bonds.
    Capital Lease Obligations and Other — Capital lease obligations and other subsidiary debt includes various promissory notes for
the purchase of property, plant and equipment and capital lease obligations. The various promissory notes payable provide for interest
at varying rates and are payable in monthly installments of principal and interest until maturity, when the remaining principal balances
are due. Capital lease obligations represent machinery and equipment financing obligations, which are payable in monthly installments
of principal and interest and are collateralized by the related assets financed.
    Letters of Credit — At December 31, 2004, there were $129.3 million of issued but undrawn letters of credit secured by our senior
credit facility. The majority of these letters of credit were required by various utilities and government entities for performance and
insurance guarantees.
    Interest Rate Agreements — We have interest rate swap agreements in place that have been designated as cash flow hedges against
variable interest rate exposure on a portion of our debt, with the objective of minimizing our interest rate risk and stabilizing cash
flows. These swap agreements provide hedges for loans under our senior credit facility by limiting or fixing the LIBOR interest rates
specified in the senior credit facility at the interest rates noted below until the indicated expiration dates of these interest rate swap
agreements.
    The following table summarizes our various interest rate agreements in effect as of December 31, 2004:
                                                                                                                        Notional
Fixed Interest Rates                                                              Expiration Date
                                                                                                                        Amounts
                                                                                                                      (In millions)
5.20% to 6.74%                                                                        December 2005               $             400
3.65% to 6.78%                                                                        December 2006                             375

                                                                   F-24




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                      DEAN FOODS COMPANY
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following table summarizes our various interest rate agreements in effect as of December 31, 2003:
                                                                                                                        Notional
Fixed Interest Rates                                                              Expiration Date
                                                                                                                        Amounts
                                                                                                                      (In millions)
1.48% to 6.69%                                                                        December 2004               $             650
5.20% to 6.74%                                                                        December 2005                             400
6.78%                                                                                 December 2006                              75

    These swaps are required to be recorded as an asset or liability on our consolidated balance sheet at fair value, with an offset to
other comprehensive income to the extent the hedge is effective. Derivative gains and losses included in other comprehensive income
are reclassified into earnings as the underlying transaction occurs. Any ineffectiveness in our hedges is recorded as an adjustment to
interest expense.
    As of December 31, 2004 and 2003, our derivative liability totaled $17.1 million and $48.4 million on our consolidated balance
sheet, respectively. This balance includes approximately $15 million and $33.6 million recorded as a component of accounts payable
and accrued expenses at December 31, 2004 and 2003, respectively and $2.1 million and $14.8 million recorded as a component of
other long-term liabilities at December 31, 2004 and 2003, respectively. There was no hedge ineffectiveness, as determined in
accordance with SFAS No. 133, for the years ended December 31, 2004 and 2003, respectively. Approximately $20.7 million and
$25.6 million of losses (net of taxes) were reclassified to interest expense from other comprehensive income during the years ended
December 31, 2004 and 2003, respectively. We estimate that approximately $9.8 million of net derivative losses (net of taxes)
included in other comprehensive income will be reclassified into earnings within the next 12 months. These losses will partially offset
the lower interest payments recorded on our variable rate debt.
    We are exposed to market risk under these arrangements due to the possibility of interest rates on the credit facilities falling below
the rates on our interest rate swap agreements. Credit risk under these arrangements is remote because the counterparties to our
interest rate swap agreements are major financial institutions.

10.     MANDATORILY REDEEMABLE TRUST ISSUED PREFERRED SECURITIES
    In three separate transactions during the second quarter of 2003, we called for redemption all of our trust-issued preferred
securities (“TIPES”). We originally issued $600 million of TIPES in a private placement in 1998. The TIPES were convertible at the
option of the holders, at any time, into shares of our common stock and were redeemable, at our option, at any time at specified
premiums. In response to our three announced redemption transactions, holders of more than 99% of all outstanding TIPES elected to
convert their TIPES into shares of our common stock rather than receive the cash redemption price. Accordingly, during the second
quarter of 2003, we issued an aggregate total of approximately 23 million shares of common stock to holders of TIPES in lieu of cash
redemption payments, and we paid approximately $2.4 million in cash to holders who did not elect to convert. There are no remaining
TIPES outstanding.

11.     STOCKHOLDERS’ EQUITY
    Our authorized shares of capital stock include 1 million shares of preferred stock and 500 million shares of common stock with a
par value of $.01 per share.
    Stock Award Plans — We currently have two stock award plans with shares remaining available for issuance. These plans, which
are our 1997 Stock Option and Restricted Stock Plan and the 1989 Legacy Dean Stock Awards Plan (which we adopted upon
completion of our acquisition of Legacy Dean), provide for grants of stock options, restricted stock and other stock-based awards to
employees, officers, directors and, in some cases, consultants, up to a maximum of 37.5 million and approximately 5.7 million shares,
respectively.

                                                                   F-25




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                    DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Options and other stock-based awards vest in accordance with provisions set forth in the applicable award agreements.
   The following table summarizes the status of our stock option compensation programs:
                                                                                                              Weighted Average
                                                                                        Options                Exercise Price
Outstanding at January 1, 2002                                                           21,095,790          $          14.11
       Granted(1)                                                                         7,711,394                     20.61
       Cancelled(2),(3)                                                                  (4,297,922)                    14.94
       Exercised                                                                         (4,950,732)                    13.79
Outstanding at December 31, 2002                                                         19,558,530                     16.55
       Granted(1)                                                                         3,508,667                     25.08
       Cancelled(3)                                                                      (1,094,262)                    20.38
       Exercised                                                                         (5,373,809)                    15.17
Outstanding at December 31, 2003                                                         16,599,126                     18.50
       Granted(1)                                                                         2,392,658                     31.37
       Options issued to Horizon Organic Option Holders(4)                                1,137,308                     16.37
       Cancelled(3)                                                                        (208,152)                    22.56
       Exercised                                                                         (3,073,219)                    17.12
Outstanding at December 31, 2004                                                         16,847,721          $          20.32
Exercisable at December 31, 2002                                                          8,997,098          $          14.42
Exercisable at December 31, 2003                                                          8,333,658                     15.62
Exercisable at December 31, 2004                                                         10,642,287                     17.16


(1) Employee options vest as follows: one-third on the first anniversary of the grant date, one-third on the second anniversary of the
    grant date, and one-third on the third anniversary of the grant date. Options granted to non-employee directors vest upon grant.
    On June 30 of each year, each non-employee director receives an immediately vested option to purchase 7,500 shares of
    common stock.
(2) The acquisition of Legacy Dean triggered certain “change in control” rights contained in the Legacy Dean option agreements,
    which consisted of the right to surrender the options to us, in lieu of exercise, in exchange for cash, provided the options were
    surrendered prior to March 21, 2002. Options to purchase approximately 2.4 million shares were surrendered.
(3) Pursuant to the terms of our stock award plans, options that are cancelled or forfeited become available for future grants.
(4) In connection with our acquisition of Horizon Organic in January 2004, all options to purchase Horizon Organic stock
    outstanding at the time of the acquisition were converted into options to purchase our stock, most of which were automatically
    vested when we completed the acquisition.

                                                                 F-26




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                     DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   The following table summarizes information about options outstanding and exercisable at December 31, 2004:
                                               Options Outstanding                                                  Options Exercisable
                                               Weighted-Average
Range of                       Number              Remaining            Weighted-Average                      Number            Weighted-Average
                                                  Contractual
         Exercise Prices     Outstanding                                    Exercise Price                   Exercisable          Exercise Price
                                                      Life
$ 0.53 to $12.48                2,572,671                 3.71              $          10.82                   2,572,671          $           10.83
$12.85 to $14.38                2,174,323                 5.64                         14.25                   2,174,323                      14.25
$14.53 to $19.98                1,703,941                 4.56                         18.14                   1,703,941                      18.14
$20.35 to $20.35                4,654,281                 7.04                         20.35                   2,743,773                      20.35
$20.39 to $24.77                  601,103                 6.34                         23.48                     522,111                      23.39
$24.79 to $24.79                2,644,824                 8.02                         24.79                     705,750                      24.79
$24.89 to $31.17                2,234,571                 9.05                         31.00                      34,839                      28.63
$31.50 to $37.31                  262,007                 9.16                         33.83                     184,879                      34.21

    During 2004, we issued the following shares of restricted stock, all of which were granted to independent members of our Board
of Directors as compensation for services rendered as directors during the immediately preceding quarter. Directors’ shares of
restricted stock vest one-third on grant, one-third on the first anniversary of grant and one-third on the second anniversary of grant.
                                                                                                                                         Grant Date
                                                                                                                                         Fair Value
Period                                                                                          Number of Shares                         Per Share
First quarter                                                                                                8,508                   $        33.40
Second quarter                                                                                               7,344                            37.31
Third quarter                                                                                                7,634                            30.20
Fourth quarter                                                                                               7,888                            33.00

    We also issued SUs to certain key employees and directors during 2004 and 2003. Each SU represents the right to receive one
share of common stock in the future. SUs have no exercise price. Each employee’s SU grant vests ratably over five years, subject to
certain accelerated vesting provisions based primarily on our stock price. SUs granted to non-employee directors vest ratably over
three years. The following table summarized the status of our SU compensation program:
                                                                                    Employees                 Directors                    Total
Outstanding at December 31, 2002                                                            —                         —                            —
SUs issued                                                                             778,750                    28,050                      806,800
SUs cancelled                                                                         (125,250)                       —                      (125,250)
Outstanding at December 31, 2003                                                       653,500                    28,050                      681,550
        SUs issued                                                                     447,700                    28,050                      475,750
        Shares issued                                                                 (101,402)                   (5,950)                    (107,352)
        SUs cancelled                                                                  (49,298)                       —                       (49,298)
SUs outstanding at December 31, 2004                                                   950,500                    50,150                    1,000,650
Weighted average fair value                                                     $        27.73           $         34.99         $              28.07
Compensation expense recognized in 2004 (in thousands)                          $        5,636           $           321         $              5,957

    Rights Plan — On February 27, 1998, our Board of Directors declared a dividend of the right to purchase one half of one common
share for each outstanding share of common stock to the stockholders of record on

                                                                     F-27




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                     DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

March 18, 1998. The rights are not exercisable until ten days subsequent to the announcement of the acquisition of or intent to acquire
a beneficial ownership of 15% or more in Dean Foods Company. At such time, each right entitles the registered holder to purchase
from us that number of shares of common stock at an exercise price of $70.00, with a market value of up to two times the exercise
price. At any time prior to such date, a required majority may redeem the rights in whole, but not in part, at a price of $0.01 per right.
The rights will expire on March 18, 2008, unless our Board of Directors extends the term of, or redeems, the rights.
    Earnings Per Share — Basic earnings per share is based on the weighted average number of common shares outstanding during
each period. Diluted earnings per share is based on the weighted average number of common shares outstanding and the effect of all
dilutive common stock equivalents during each period. The following table reconciles the numerators and denominators used in the
computations of both basic and diluted EPS:
                                                                                      Year Ended December 31
                                                                   2004                         2003                       2002
                                                                                  (In thousands, except share data)
Basic EPS computation:
    Numerator:
            Income from continuing operations               $         285,374          $           355,703            $       267,751
    Denominator:
            Average common shares                                 154,635,979                 145,201,412                 135,031,274
        Basic EPS from continuing operations                $            1.85          $             2.45             $          1.98
Diluted EPS computation:
    Numerator:
            Income from continuing operations               $         285,374          $           355,703            $       267,751
            Net effect on earnings from conversion of
              mandatorily redeemable convertible
              preferred securities                                         —                         8,994                     21,324
            Income applicable to common stock               $         285,374          $           364,697            $       289,075
    Denominator:
            Average common shares — basic                         154,635,979                 145,201,412                 135,031,274
            Stock option conversion(1)                              5,125,070                   5,346,882                   5,132,746
            SUs                                                       943,527                     729,655                          —
            Dilutive effect of conversion of
              mandatorily redeemable convertible
              preferred securities                                         —                    9,417,721                  22,999,884
Average common shares — diluted                                   160,704,576                 160,695,670                 163,163,904
Diluted EPS from continuing operations                      $            1.78          $             2.27             $          1.77


(1) Stock option conversion excludes anti-dilutive shares of 49,742, 58,344 and 263,655 at December 31, 2004, 2003 and 2002,
    respectively.
    Stock Repurchases — On September 15, 1998, our Board of Directors authorized a stock repurchase program of up to
$100 million. On September 28, 1999, the Board increased the program by $100 million to $200 million and on November 17, 1999
authorized a further increase to $300 million. We depleted the $300 million authorization during the second quarter of 2000, and on
May 19, 2000, the Board increased the program by $100 million to $400 million. On November 2, 2000, the Board authorized a
further increase to

                                                                  F-28




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                    DEAN FOODS COMPANY
                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$500 million. On each of January 8, 2003 and February 12, 2003, the Board authorized additional increases of $150 million each. On
September 7, 2004 the Board authorized an additional increase of $200 million and on November 2, 2004 the Board authorized an
additional increase of $100 million. Set forth in the chart below is a summary of the stock we repurchased pursuant to this program
through December 31, 2004.
                                                                                  No. of Shares of
                                                                                  Common Stock
Year      Quarter                                                                  Repurchased                 Purchase Price
                                                                                                                (In millions)
1998      Third                                                                           3,000,000           $         30.4
          Fourth                                                                          1,531,200                     15.6
1999      Second                                                                            239,100                      3.0
          Third                                                                           5,551,545                     66.7
          Fourth                                                                         10,459,524                    128.4
2000      First                                                                           2,066,400                     27.2
          Second                                                                          2,898,195                     42.2
          Third                                                                           4,761,000                     77.0
          Fourth                                                                            120,000                      2.1
2001      First                                                                             370,002                      6.1
2002      Fourth                                                                          4,126,200                    101.2
2003      First                                                                           4,854,900                    128.5
          Third                                                                             360,000                      9.9
          Fourth                                                                          1,453,400                     47.1
2004      First                                                                             150,000                      5.1
          Third                                                                           7,825,000                    251.9
          Fourth                                                                          1,335,000                     39.6
           Total                                                                         51,101,466           $        982.0


   As of December 31, 2004, $118 million was available for spending under this program (not including fees and commissions).
   Repurchased shares are treated as effectively retired in the Consolidated Financial Statements.

                                                                F-29




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                    DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


12.   OTHER COMPREHENSIVE INCOME
   Comprehensive income comprises net income plus all other changes in equity from non-owner sources. The amount of income tax
(expense) benefit allocated to each component of other comprehensive income for December 31, 2004 and 2003 are included below.
                                                                              Pre-Tax
                                                                              Income                Tax Benefit               Net
                                                                               (Loss)                (Expense)               Amount
                                                                                                    (In thousands)
Accumulated other comprehensive income, January 1, 2003                   $     (91,684)       $          35,979         $       (55,705)
Cumulative translation adjustment                                                16,210                    2,037                  18,247
Net change in fair value of derivative instruments                              (12,338)                   4,688                  (7,650)
Amounts reclassified to income statement related to derivatives                  43,733                  (18,123)                 25,610
Minimum pension liability adjustment                                            (18,652)                   7,130                 (11,522)
Accumulated other comprehensive income, December 31, 2003                       (62,731)                  31,711                 (31,020)
Cumulative translation adjustment                                                17,313                       —                   17,313
Net change in fair value of derivative instruments                               (1,443)                     726                    (717)
Amounts reclassified to income statement related to derivatives                  32,754                  (12,031)                 20,723
Minimum pension liability adjustment                                            (23,316)                   8,858                 (14,458)
Accumulated other comprehensive income, December 31, 2004                 $     (37,423)       $          29,264         $        (8,159)


13.   EMPLOYEE RETIREMENT AND PROFIT SHARING PLANS
    We sponsor various defined benefit and defined contribution retirement plans, including various employee savings and profit
sharing plans, and contribute to various multi-employer pension plans on behalf of our employees. Substantially all full-time union
and non-union employees who have completed one or more years of service and have met other requirements pursuant to the plans are
eligible to participate in these plans. During 2004, 2003 and 2002, our retirement and profit sharing plan expenses were as follows:
                                                                                                    Year Ended December 31
                                                                                        2004                   2003               2002
                                                                                                         (In thousands)
Defined benefit plans                                                               $      11,029         $     15,312       $     9,052
Defined contribution plans                                                                 19,497               16,873            13,731
Multi-employer pension and certain union plans                                             23,777               24,358            17,868
                                                                                    $      54,303         $     56,543       $    40,651


   Defined Benefit Plans — The benefits under our defined benefit plans are based on years of service and employee compensation.
Our funding policy is to contribute annually the minimum amount required under ERISA regulations.
    As of December 31, 2004, the latest measurement date, the accumulated benefit obligation of the pension plans exceeded the fair
value of plan assets. In accordance with SFAS No. 87, “Employer’s Accounting for Pensions”, we recorded an additional minimum
pension liability of $23.3 million ($14.5 million, net of tax). The adjustment to the additional minimum pension liability was included
in other accumulated comprehen-

                                                                  F-30




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Table of Contents

                                                    DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

sive loss as a direct charge to stockholders’ equity. As of December 31, 2004, the cumulative additional minimum pension charge
included in other accumulated comprehensive loss was $61.3 million ($38.1 million, net of tax).
    The following table sets forth the funded status of our defined benefit plans and the amounts recognized in our consolidated
balance sheets.
                                                                                                        December 31
                                                                                               2004                     2003
                                                                                                       (In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year                                                   $      281,194           $     261,367
      Service cost                                                                                 2,724                   2,799
      Interest cost                                                                               17,942                  17,752
      Plan participants’ contributions                                                               133                      73
      Plan amendments                                                                                 —                    9,510
      Actuarial loss                                                                              30,809                  18,521
      Effect of settlement                                                                            —                     (603)
      Benefits paid                                                                              (29,370)                (28,225)
Benefit obligation at end of year                                                                303,432                 281,194
Change in plan assets:
Fair value of plan assets at beginning of year                                                   151,598                 124,759
      Actual return on plan assets                                                                14,812                  24,952
      Employer contribution                                                                       43,831                  31,171
      Plan participants’ contributions                                                               133                      73
      Effect of settlement                                                                            —                   (1,132)
      Benefits paid                                                                              (29,370)                (28,225)
Fair value of plan assets at end of year                                                         181,004                 151,598
Funded status                                                                                   (122,428)               (129,596)
      Unrecognized net transition obligation                                                         892                     999
      Unrecognized prior service cost                                                             10,317                  11,025
      Unrecognized net loss                                                                       69,733                  43,741
Net amount recognized                                                                     $      (41,486)          $     (73,831)
Amounts recognized in the statement of financial position consist of:
      Accrued benefit liability                                                           $     (114,386)          $    (124,307)
      Intangible asset                                                                            11,638                  12,530
      Accumulated other comprehensive income                                                      61,262                  37,946
Net amount recognized                                                                     $      (41,486)          $     (73,831)

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Table of Contents

                                                    DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   A summary of our key actuarial assumptions used to determine benefit obligations as of December 31, 2004 and 2003 follows:
                                                                                                            December 31
                                                                                                2004                   2003
Discount rate                                                                                     5.75%                 6.00 to 6.50%
Expected return on plan assets                                                                    8.50%                         8.50%
Rate of compensation increase                                                                     4.00%                         4.00%

   A summary of our key actuarial assumptions used to determine net periodic benefit cost for 2004, 2003 and 2002 follows:
                                                                                     Year Ended December 31
                                                                 2004                         2003                        2002
Discount rate                                                    6.00 to 6.50%               6.50 to 6.75%                       7.25%
Expected return on plan assets                                           8.50%               6.75 to 8.50%               6.75 to 9.00%
Rate of compensation increase                                            4.00%                       4.00%                     0-5.00%

                                                                                                        December 31
                                                                                     2004                   2003                  2002
                                                                                                       (In thousands)
Components of net periodic pension cost:
       Service cost                                                              $     2,724           $      2,799           $     1,581
       Interest cost                                                                  17,942                 17,752                18,954
       Expected return on plan assets                                                (13,994)               (10,430)              (15,142)
Amortizations:
       Unrecognized transition obligation                                                107                     107                  106
       Prior service cost                                                                708                     708                  190
       Unrecognized net loss                                                           1,665                   1,833                  332
       Effect of settlement                                                            1,877                   2,543                3,031
Net periodic benefit cost                                                        $    11,029           $      15,312          $     9,052


   The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with
accumulated benefit obligations in excess of plan assets were $303.4 million, $293.6 million and $181 million, respectively, as of
December 31, 2004 and $281.2 million, $275.6 million and $151.6 million, respectively, as of December 31, 2003. Included in the
above pension benefit tables is an unfunded supplemental retirement plan with a liability of $2.2 million and $5.8 million at
December 31, 2004 and 2003, respectively.
    In 2004, we consolidated substantially all of our qualified pension plans into one master trust. We retained investment consultants
to assist our Investment Committee with the transition of the plans’ assets to the master trust and to help our Investment Committee
formulate a long-term investment policy for the newly established master trust. Our current asset mix guidelines under the investment
policy target equities at 65% to 75% of the portfolio and fixed income at 25% to 35%.
   We determine our expected long-term rate of return based on our expectations of future returns for the pension plan’s investments
based on target allocations of the pension plan’s investments. Additionally, we consider the weighted-average return of a capital
markets model that was developed by the plans’ investment consultants and historical returns on comparable equity, debt and other
investments. The resulting weighted average expected long-term rate of return on plan assets is 8.5%.

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Table of Contents

                                                     DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Our pension plan weighted average asset allocations at December 31, 2004 and 2003 by asset category were as follows:
Asset Category                                                             December 31, 2004               December 31, 2003
Equity securities and limited partnerships                                               74%                             65%
Fixed income securities                                                                  25                              18
Cash                                                                                      1                              14
Other                                                                                    —                                3
    Total                                                                               100%                            100%


      Equity securities of the plan did not include any investment in our common stock at December 31, 2004 or 2003.
   We expect to contribute $33.7 million to the pension plans for 2005. Estimated pension plan benefit payments for the next ten
years are as follows:
2005                                                                                                                      $ 9.5 million
2006                                                                                                                        9.4 million
2007                                                                                                                       10.1 million
2008                                                                                                                        9.9 million
2009                                                                                                                       10.1 million
Next five years                                                                                                            52.6 million

    Defined Contribution Plans — Certain of our non-union personnel may elect to participate in savings and profit sharing plans
sponsored by us. These plans generally provide for salary reduction contributions to the plans on behalf of the participants of between
1% and 20% of a participant’s annual compensation and provide for employer matching and profit sharing contributions as determined
by our Board of Directors. In addition, certain union hourly employees are participants in company-sponsored defined contribution
plans, which provide for employer contributions in various amounts ranging from $21 to $39 per pay period per participant.
    Multi-Employer Pension and Certain Union Plans — Certain of our subsidiaries contribute to various multi-employer pension and
certain union plans, which are administered jointly by management and union representatives and cover substantially all full-time and
certain part-time union employees who are not covered by our other plans. The Multi-Employer Pension Plan Amendments Act of
1980 amended ERISA to establish funding requirements and obligations for employers participating in multi-employer plans,
principally related to employer withdrawal from or termination of such plans. We could, under certain circumstances, be liable for
unfunded vested benefits or other expenses of jointly administered union/management plans. At this time, we have not established any
significant liabilities because withdrawal from these plans is not probable or reasonably possible.

14.     POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
    Certain of our subsidiaries provide health care benefits to certain retirees who are covered under specific group contracts. As
defined by the specific group contract, qualified covered associates may be eligible to receive major medical insurance with deductible
and co-insurance provisions subject to certain lifetime maximums.

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Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                   DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   The following table sets forth the funded status of these plans and the amounts recognized in our consolidated balance sheets:
                                                                                                             December 31
                                                                                                     2004                         2003
                                                                                                            (In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year                                                        $        22,646             $        22,198
      Service cost                                                                                         948                       1,169
      Interest cost                                                                                      1,371                       1,217
      Actuarial loss                                                                                     1,970                         598
      Benefits paid                                                                                     (2,799)                     (2,536)
Benefit obligation at end of year                                                                       24,136                      22,646
Fair value of plan assets at end of year                                                                    —                           —
Funded status                                                                                          (24,136)                    (22,646)
      Unrecognized prior service cost                                                                     (650)                     (2,552)
      Unrecognized net loss                                                                              6,288                       6,424
Net amount recognized                                                                          $       (18,498)            $       (18,774)


   A summary of our key actuarial assumptions used to determine the benefit obligation as of December 31, 2004 and 2003 follows:
                                                                                                     December 31
                                                                                       2004                                2003
Healthcare inflation:
      Initial rate                                                                           10.00%                               12.00%
      Ultimate rate                                                                   5.00 to 5.50%                                5.00%
      Year of ultimate rate achievement                                                      2009                                 2009
Discount rate                                                                                 5.75%                        6.00 to 6.50%

   The weighted average discount rate used to determine net periodic benefit cost was 6.0% to 6.5%, 6.5% to 6.75% and 7.25% for
2004, 2003 and 2002, respectively.
                                                                                                             December 31
                                                                                              2004               2003                    2002
                                                                                                            (In thousands)
Components of net periodic benefit cost:
       Service and interest cost                                                         $     2,319         $     2,386           $      2,178
Amortizations:
       Prior service cost                                                                        (69)               (207)                  (210)
       Unrecognized net loss                                                                     326                 230                    133
Net periodic benefit cost                                                                $     2,576         $     2,409           $      2,101

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                                                      DEAN FOODS COMPANY
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percent
change in assumed health care cost trend rates would have the following effects:
                                                                                      1-Percentage-                     1-Percentage-
                                                                                      Point Increase                    Point Decrease
                                                                                                       (In thousands)
Effect on total of service and interest cost components                             $            184                $             (164)
Effect on postretirement obligation                                                            2,057                            (1,810)

   We expect to contribute $1.8 million to the postretirement health care plans for 2005. Estimated postretirement health care plan
benefit payments for the next ten years are as follows:
2005                                                                                                       $             1.8 million
2006                                                                                                                     2.0 million
2007                                                                                                                     2.1 million
2008                                                                                                                     2.3 million
2009                                                                                                                     2.4 million
Next five years                                                                                                         11.9 million


15.      FACILITY CLOSING AND REORGANIZATION COSTS
   Facility Closing and Reorganization Costs — We recorded net facility closing and reorganization costs of $34.7 million,
$11.8 million and $19.1 million during 2004, 2003 and 2002, respectively.
      The charges recorded during 2004 are primarily related to the following:
      • Exiting the nutritional beverages business operated by our Specialty Foods Group segment, including the closure of a
        manufacturing facility in Benton Harbor, Michigan;
      • Closing Dairy Group manufacturing facilities in Madison, Wisconsin; San Leandro and South Gate, California; Westwego,
        Louisiana; Pocatello, Idaho and Wilkesboro, North Carolina;
      • Reorganizing our WhiteWave Foods Company including consolidating the operations of the three distinct operating units: White
        Wave, Horizon Organic, and Dean National Brand Group; and
      • Transferring Morningstar Foods’ private label and manufacturing operations to the Dairy Group.
      The charges recorded during 2003 are primarily related to the following:
      • Closing of Dairy Group manufacturing/distribution facilities in Honolulu, Hawaii; South Gate, California; Jamaica, New York;
        and Akron, Ohio;
      • Elimination of certain administrative functions at the Midwest and Northeast regions of our Dairy Group; and
      • Realignment of Morningstar Food’s private label business and manufacturing operations into the Dairy Group.
    These charges were accounted for in accordance with SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal
Activities,” which became effective for us in January 2003. We expect to incur additional charges related to these restructuring plans
of approximately $7.1 million, including an additional $520,000 in work force reduction costs and approximately $6.6 million in shut
down and other costs. Approximately $5.9 million and $1 million of these additional charges are expected to be completed by
December 2005 and December 2006, respectively.

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Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                      DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

    The charges recorded during 2002 are related to the closing of Dairy Group facilities in Bennington, Vermont and Toledo, Ohio, a
Dairy Group distribution facility in Winchester, Virginia, and one Morningstar Foods facility in Tempe, Arizona. The charges also
reflect additional costs related to severance on the closing of our Dairy Group facility in Port Huron, Michigan in 2001, the shutdown
of an ice cream production line at our Englewood, Colorado facility and the closing of a Dairy Group facility’s administrative offices
in Grand Rapids, Michigan.
   The principal components of our continued reorganization and cost reduction efforts include the following:
    • Workforce reductions as a result of facility closings, facility reorganizations and consolidation of administrative functions;
    • Shutdown costs, including those costs that are necessary to prepare abandoned facilities for closure;
    • Costs incurred after shutdown such as lease obligations or termination costs, utilities and property taxes;
    • Costs associated with the reorganization of the WhiteWave Foods Company supply chain and distribution activities, including
      termination of certain contractual agreements; and
    • Write-downs of property, plant and equipment and other assets, primarily for asset impairments as a result of facilities that are no
      longer used in operations. The impairments relate primarily to owned buildings, land and equipment at the facilities, which are
      written down to their estimated fair value and held for sale. The effect of suspending depreciation on the buildings and
      equipment related to the closed facilities was not significant. The carrying value of closed facilities at December 31, 2004 was
      approximately $15.8 million. We are marketing these properties for sale.
    We consider several factors when evaluating a potential facility closure, including, among other things, the impact of such a
closure on our customers, the impact on production, distribution and overhead costs, the investment required to complete any such
closure, and the impact on future investment decisions. Some facility closures are pursued to improve our operating cost structure,
while others enable us to avoid unnecessary capital expenditures, allowing us to more prudently invest our capital expenditure dollars
in our production facilities and better serve our customers.
    In the second quarter of 2004, we sold a closed Dairy Group facility in Honolulu, Hawaii. In 2003, when we closed this facility,
we recorded facility closing costs, which included a write-down in the value of the facility and accruals for certain lease obligations.
Because we sold the facility for more than expected, we reversed the impairment charge by recording a credit to restructuring expense
of $1.7 million and reversed $470,000 of lease obligations that were cancelled.
    In the first quarter of 2003, we sold a Dairy Group facility in Port Huron, Michigan. In 2001, we closed this facility and recorded
facility closing costs, which included a write-down in the value of the facility. We sold the closed facility for more than expected,
resulting in a gain of $1.6 million. This gain was recorded as a reduction of facility closing expense in 2003.

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Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                            DEAN FOODS COMPANY
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   Activity for 2004 and 2003 with respect to facility closing and reorganization costs for exit plans approved after January 1, 2003,
which was accounted for under FAS No. 146, is summarized below:
                                      Accrued                                                  Accrued                                                    Accrued
                                     Charges at                                               Charges at                                                 Charges at
                                                                                              December                                                   December
                                    December 31,                                                                   Charges/
                                                                                                 31,                                                        31,
                                         2002            Charges            Payments            2003                (Gain)               Payments          2004
                                                                                               (In thousands)
Cash charges:
      Workforce reduction costs     $      —         $     8,737           $   (2,775)      $     5,962           $ 10,206           $        (9,553)    $       6,615
      Shutdown costs                       —                 203                 (203)               —               5,800                    (5,800)               —
      Lease obligations after
        shutdown                           —              491                     (14)              477                (40)                     (363)               74
      Settlement of contracts              —               —                       —                 —               3,788                    (3,788)               —
      Other                                —              971                    (918)               53              3,842                    (3,888)                7
Subtotal                            $      —         $ 10,402              $   (3,910)      $     6,492           $ 23,596           $       (23,392)    $       6,696
Noncash charges:
      Write-down of assets                              3,093                                                       13,099
      Gain on sale of facility                             —                                                        (1,695)
Total charges                                        $ 13,495                                                     $ 35,000


   Activity for 2004 and 2003 with respect to facility closing and reorganization costs for exit plans approved before January 1, 2003,
which was accounted for under EITF 94-3, is summarized below:
                                         Accrued                                                       Accrued                                               Accrued
                                                                                                                                                              Charges
                                        Charges at                                                 Charges at
                                                                                                                                                                at
                                        December                                                     December                                                December
                                                                Charges/                                              Charges/
                                           31,                                                          31,                                                     31,
                                          2002                   (Gain)          Payments              2003               (Gain)          Payments             2004
                                                                                                (In thousands)
Cash charges:
      Workforce reduction costs      $      3,882           $        234        $   (2,673)        $      1,443       $      (245)       $       (805)       $    393
      Shutdown costs                        1,657                     (7)           (1,093)                 557                54                (324)            287
      Lease obligations after
        shutdown                              668                     —               (660)                   8                —                   (8)             —
      Other                                   786                   (290)             (212)                 284                32                 (82)            234
Subtotal                             $      6,993                    (63)       $   (4,638)        $      2,292              (159)       $     (1,219)       $    914
Noncash charges:
      Gain on sale of facility                                    (1,645)                                                    (146)
Total charges                                               $     (1,708)                                             $      (305)


    Acquired Facility Closing and Other Exit Costs — As part of our purchase price allocations, we accrue costs from time to time
pursuant to plans to exit certain facilities and activities of acquired businesses in order to rationalize production and reduce costs and
inefficiencies. During 2004, we accrued costs to close two Dairy Group facilities acquired in 2003 and the Horizon Organic Farm and
Education Center acquired in 2004, as well as to exit certain acquired contractual obligations. During 2003, we accrued costs related
to the closing of an ice cream facility acquired in July 2003 by our Dairy Group. One facility was closed in connection with our
acquisition of Marie’s in May 2002 and several facilities were closed in connection with our acquisition of Legacy Dean.

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                                                        DEAN FOODS COMPANY
                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The principal components of the plans include the following:
      • Workforce reductions as a result of facility closings, facility reorganizations and consolidation of administrative functions and
        offices;
      • Shutdown costs, including those costs necessary to clean and prepare abandoned facilities for closure; and
      • Costs incurred after shutdown such as lease or termination costs, utilities and property taxes after shutdown of the facility, as
        well as, costs to exit certain contractual obligations.
Also during 2004, we recorded certain adjustments to reduce our acquisition liability by approximately $1.7 million related to exit
activities in our Specialty Foods Group segment. The liabilities were recorded as part of our overall integration and efficiency efforts
related to our acquisition of the former Dean Foods Company. These adjustments reduced goodwill.
      Activity with respect to these acquisition liabilities for 2004 is summarized below:
                                              Accrued                                                                         Accrued
                                             Charges at                                                                      Charges at
                                            December 31,                                                                    December 31,
                                                2003                 Accruals         Payments           Adjustments            2004
                                                                                    (In thousands)
Workforce reduction costs                   $      2,871         $      2,403       $    (2,668)      $         (474)      $      2,132
Shutdown and exit costs                            6,317               82,271            (4,020)              (1,263)            83,305
Total                                       $      9,188         $     84,674       $    (6,688)      $       (1,737)      $     85,437


      Activity with respect to these acquisition liabilities for 2003 is summarized below:
                                                              Accrued                                                        Accrued
                                                             Charges at                                                     Charges at
                                                            December 31,                                                   December 31,
                                                                2002                Accruals           Payments                2003
                                                                                          (In thousands)
Workforce reduction costs                                  $       9,002            $    100         $       (6,231)       $      2,871
Shutdown and exit costs                                           11,637                 500                 (5,820)              6,317
Total                                                      $      20,639            $    600         $      (12,051)       $      9,188


16.      OTHER OPERATING (INCOME) EXPENSE
      In the fourth quarter of 2004 we recognized a $5.9 million gain primarily related to the settlement of litigation.
   In the third quarter of 2003, we recognized a gain on the sale of our frozen pre-whipped topping and frozen creamer operations of
$66.2 million. During the fourth quarter of 2003, we recognized $2.5 million of other operating income as a result of certain
contingencies related to the divestiture of 11 facilities in 2001 being favorably resolved.

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Source: DEAN FOODS CO, 10-K, March 16, 2005
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                                                      DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


17.   SUPPLEMENTAL CASH FLOW INFORMATION
                                                                                              Year Ended December 31
                                                                                   2004                 2003                       2002
                                                                                                   (In thousands)
Cash paid for interest and financing charges, net of capitalized interest     $    160,886         $   182,825             $       224,561
Cash paid for taxes                                                                 27,453              19,788                      44,738
Noncash transactions:
       Exchange of trust issued preferred securities                                      —            582,986                             —


18.   COMMITMENTS AND CONTINGENCIES
    Leases and Purchase Obligations — We lease certain property, plant and equipment used in our operations under both capital and
operating lease agreements. Such leases, which are primarily for machinery, equipment and vehicles, have lease terms ranging from 1
to 20 years. Certain of the operating lease agreements require the payment of additional rentals for maintenance, along with additional
rentals based on miles driven or units produced. Certain leases require us to guarantee a minimum value of the leased asset at the end
of the lease. Our maximum exposure under those guarantees is not a material amount. Rent expense, including additional rent, was
$129.1 million, $121.2 million and $124.5 million for 2004, 2003 and 2002, respectively.
    The composition of capital leases which are reflected as property, plant and equipment in our consolidated balance sheets are as
follows:
                                                                                                                  December 31
                                                                                                           2004                     2003
                                                                                                                  (In thousands)
Buildings and improvements                                                                             $      851              $       707
Machinery and equipment                                                                                     7,192                    1,940
Other                                                                                                         228                       —
Less accumulated amortization                                                                                (774)                    (779)
                                                                                                       $    7,497              $     1,868


    We have entered into various contracts obligating us to purchase minimum quantities of raw materials used in our production
processes, including organic soybeans, organic raw milk and cucumbers. We enter into these contracts from time to time to ensure a
sufficient supply of raw ingredients. In addition, we have contractual obligations to purchase various services that are part of our
production process.

                                                                   F-39




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                     DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

   Future minimum payments at December 31, 2004, under non-cancelable capital leases and operating leases with terms in excess of
one year and purchase obligations are summarized below:
                                                                                Capital            Operating              Purchase
                                                                                Leases               Leases              Obligations
                                                                                                   (In thousands)
2005                                                                        $      1,466       $      100,617        $       325,652
2006                                                                               1,298               83,821                 55,193
2007                                                                               1,093               71,350                 20,622
2008                                                                                 911               60,163                 18,784
2009                                                                                 881               56,090                 16,941
Thereafter                                                                        10,014              116,289                 47,917
Total minimum lease payments                                                      15,663       $      488,330        $       485,109
Less amount representing interest                                                 (9,340)
Present value of capital lease obligations                                  $      6,323


    Contingent Obligations Related to Milk Supply Arrangements — On December 21, 2001, in connection with our acquisition of
the former Dean Foods Company, we purchased Dairy Farmers of America’s (“DFA”) 33.8% interest in our Dairy Group. In
connection with that transaction, we entered into two agreements with DFA designed to ensure that DFA has the opportunity to
continue to supply raw milk to certain of our facilities, or be paid for the loss of that business. One such agreement is a promissory
note with a 20-year term that bears interest based on the consumer price index. Interest will not be paid in cash but will be added to the
principal amount of the note annually, up to a maximum principal amount of $96 million. We may prepay the note in whole or in part
at any time, without penalty. The note will only become payable if we ever materially breach or terminate one of our milk supply
agreements with DFA without renewal or replacement. Otherwise, the note will expire in 2021, without any obligation to pay any
portion of the principal or interest. Payments made under the note, if any, would be expensed as incurred. The other agreement would
require us to pay damages to DFA if we fail to offer DFA the right to supply milk to certain facilities that we acquired as part of the
former Dean Foods after the pre-existing agreements with certain other suppliers or producers expire.
    Contingent Obligations Related to Divested Operations — We have sold several businesses in recent years. In each case, we have
retained certain known contingent obligations related to those businesses and/ or assumed an obligation to indemnify the purchasers of
the businesses for certain unknown contingent liabilities, including environmental liabilities. In the case of the sale of our Puerto Rico
operations, we were required to post collateral, including one surety bond and one letter of credit, to secure our obligation to satisfy
the retained known liabilities and to fulfill our indemnification obligation. We believe we have established adequate reserves for any
potential liability related to our divested businesses. Moreover, we do not expect any liability that we may have for these retained
liabilities, or any indemnification liability, to be material.
    Insurance — We retain selected levels of property and casualty risks, primarily related to employee health care, workers’
compensation claims and other casualty losses. Many of these potential losses are covered under conventional insurance programs
with third party carriers with high deductible limits. In other areas, we are self-insured with stop-loss coverages. These deductibles
range from $350,000 for medical claims to $2 million for casualty claims. We believe we have established adequate reserves to cover
these claims.
    Litigation, Investigations and Audits — We are parties from time to time to certain claims, litigation, audits and investigations. We
believe that we have established adequate reserves to satisfy any potential liability we may have under all such claims, litigations,
audits and investigations that are currently pending. In

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Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

                                                      DEAN FOODS COMPANY
                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

our opinion, the settlement of any such currently pending or threatened matter is not expected to have a material adverse impact on our
financial position, results of operations or cash flows.

19.     FAIR VALUE OF FINANCIAL INSTRUMENTS
    Pursuant to SFAS No. 107, “Disclosure About Fair Value of Financial Instruments,” we are required to disclose an estimate of the
fair value of our financial instruments as of December 31, 2004 and 2003. SFAS No. 107 defines the fair value of financial
instruments as the amount at which the instrument could be exchanged in a current transaction between willing parties.
    Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to
fair value. In addition, because the interest rates on our senior credit facility and most other debt are variable, their fair values
approximate their carrying values.
   We have senior notes with an aggregate face value of $700 million with fixed interest rates ranging from 6.625% to 8.15% at
December 31, 2004. These notes were issued by Legacy Dean prior to our acquisition of Legacy Dean, and had a fair market value of
$737.2 million at December 31, 2004.
    We have entered into various interest rate agreements to reduce our sensitivity to changes in interest rates on our variable rate debt.
The fair values of these instruments and our senior notes were determined based on fair values for similar instruments with similar
terms. The following table presents the carrying value and fair value of our senior notes and interest rate agreements at December 31:
                                                                 2004                                                      2003
                                                Carrying Value                Fair Value                 Carrying Value               Fair Value
                                                 of Liability                 of Liability                  of Liability              of Liability
                                                                                             (In thousands)
Senior notes                                   $      664,696             $       737,188               $       660,663           $       699,234
Interest rate agreements                               17,061                      17,061                        48,368                    48,368


20.     SEGMENT AND GEOGRAPHIC INFORMATION AND MAJOR CUSTOMERS
      We currently have three reportable segments: the Dairy Group, WhiteWave Foods Company and the Specialty Foods Group.
    Our Dairy Group segment is our largest segment. It manufactures, markets and distributes a wide variety of branded and private
label dairy case products, such as milk, cream, ice cream, cultured dairy products and juices, to retailers, distributors, foodservice
outlets, schools and governmental entities across the United States.
    Our WhiteWave Foods Company segment manufactures, develops, markets and sells a variety of nationally branded soy, dairy and
dairy-related products, such as Silk soymilk and cultured soy products, Horizon Organic milk, juice and other products; International
Delight coffee creamers; and LAND O’LAKES fluid and cultured products. WhiteWave Foods Company sells its products to a variety
of customers, including grocery stores, club stores, natural foods stores, mass merchandisers, convenience stores and foodservice
outlets. The WhiteWave Foods Company’s operations have historically been conducted through three distinct operating units: White
Wave, Horizon Organic and Dean National Brand Group. We are currently in the process of consolidating these three operating units
and expect the consolidation to be completed in 2006.
   Prior to 2004, we had a Morningstar Foods division that manufactured, marketed and sold all of our nationally branded products
except for our soy products, and also manufactured and sold private label dairy products. Effective January 1, 2004, we (1) shifted all
of Morningstar Foods’ private label sales and all of its manufacturing operations to the Dairy Group, (2) formed the Dean National
Brand Group, and (3) transferred Morningstar Foods’ branded business to the Dean National Brand Group. As a result of this

                                                                   F-41




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                                                      DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

reorganization, we implemented a new segment reporting structure effective January 1, 2004. All periods prior to 2004 have been
restated to reflect our new segment reporting structure.
    The Dairy Group, which now manufactures a portion of WhiteWave Foods Company’s products, transfers finished products to
WhiteWave Foods Company at or near cost. A small percentage of our WhiteWave Foods Company’s products (approximately
$50.6 million and $23.7 million in 2004 and 2003, respectively) are sold through the Dairy Group’s direct store delivery network.
Those sales, together with their related costs, are included in WhiteWave Foods Company for segment reporting purposes. Fixed
assets, capital expenditures and depreciation related to our facilities that manufacture WhiteWave Foods Company’s products (except
for two manufacturing facilities which are owned and operated by White Wave) are reported as part of the Dairy Group, while
intangibles and any associated amortization related to WhiteWave Foods Company’s brands are reported as part of WhiteWave Foods
Company.
    Our Specialty Foods Group is the nation’s leading private label pickle processor, and one of the largest manufacturers and sellers
of non-dairy powdered creamer in the United States. The Specialty Foods Group also manufactures and sells a variety of other foods,
such as sauces and puddings.
    Our International Group, which does not qualify as a reportable segment, manufactures, markets and sells private label and
branded milk, butter and cream through its internal sales force to retailers and distributors across Spain and Portugal. Net sales,
income and assets of the International Group are reflected in the charts below on the Corporate/ Other lines.
    We evaluate the performance of our segments based on operating profit or loss before gains and losses on the sale of assets,
facility closing and reorganization costs and foreign exchange gains and losses. Therefore, the measure of segment profit or loss
presented below is before such items.
    The amounts in the following tables are obtained from reports used by our executive management team and do not include any
allocated income taxes or management fees. There are no significant non-cash items reported in segment profit or loss other than
depreciation and amortization.
                                                                           2004                      2003                  2002(1)
                                                                                               (In thousands)
Net sales to external customers:
       Dairy Group                                                  $      8,646,387          $     7,542,102         $     7,600,985
       WhiteWave Foods Company                                             1,188,401                  713,425                 517,304
       Specialty Foods Group                                                 676,768                  684,207                 673,604
       Corporate/ Other                                                      310,729                  244,882                 199,571
       Total                                                        $     10,822,285          $     9,184,616         $     8,991,464
Intersegment sales:
       Dairy Group                                                  $          56,844         $         27,982        $         4,711
       WhiteWave Foods Company                                                  7,483                    1,618                    511
       Specialty Foods Group                                                    3,594                   10,692                 16,287
       Total                                                        $          67,921         $         40,292        $        21,509

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                                                  DEAN FOODS COMPANY
                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

                                                                       2004                    2003                 2002(1)
                                                                                         (In thousands)
Operating income:
      Dairy Group                                                $       594,462        $       641,020        $       592,455
      WhiteWave Foods Company                                            118,400                 33,575                 59,198
      Specialty Foods Group                                               68,426                101,292                 98,874
      Corporate/ Other                                                   (85,599)               (66,834)               (68,870)
      Segment operating income                                           695,689                709,053                681,657
      Facility closing and reorganization costs                           34,695                 11,787                 19,050
      Other operating income                                              (5,899)               (68,719)                    —
      Total                                                              666,893                765,985                662,607
Other (income) expense:
      Interest expense and financing charges                             204,770                195,298                231,263
      Equity in (earnings) loss of unconsolidated affiliates                  —                    (244)                 7,899
      Other (income) expense, net                                           (253)                (2,625)                 2,660
      Consolidated income from continuing operations before
        tax                                                      $       462,376        $       573,556        $       420,785
Depreciation and amortization:
      Dairy Group                                                $       177,720        $       154,812        $       138,450
      WhiteWave Foods Company                                              9,905                  1,793                  1,113
      Specialty Foods Group                                               16,126                 14,505                 14,101
      Corporate/ Other                                                    19,796                 20,775                 20,330
      Total                                                      $       223,547        $       191,885        $       173,994
Assets:
      Dairy Group                                                $     5,397,694        $     5,207,262        $     5,213,748
      WhiteWave Foods Company                                          1,219,210                638,788                272,486
      Specialty Foods Group                                              604,687                635,321                617,210
      Corporate/ Other                                                   534,777                511,165                478,822
      Total                                                      $     7,756,368        $     6,992,536        $     6,582,266
Capital expenditures:
      Dairy Group                                                $       270,682        $       245,078        $       222,359
      WhiteWave Foods Company                                             27,969                 12,714                  1,899
      Specialty Foods Group                                               21,905                 18,511                 11,176
      Corporate/ Other                                                    35,580                 15,359                  6,548
      Total                                                      $       356,136        $       291,662        $       241,982


(1) Balances for 2002 have been restated to remove our Puerto Rico operations, which have been reclassified as discontinued
    operations.

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                                                           DEAN FOODS COMPANY
                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Geographic Information
                                               Net Sales                                                        Long-Lived Assets
                            2004                  2003                    2002(1)                 2004                2003                    2002
                                                                                (In thousands)
United States         $   10,461,706       $     8,939,734          $     8,791,893        $     5,915,413       $    5,429,202         $    5,137,695
Europe                       360,579               244,882                  199,571                244,531              162,453                126,984
  Total               $   10,822,285       $     9,184,616          $     8,991,464        $     6,159,944       $    5,591,655         $    5,264,679


(1) Net sales for 2002 have been restated to remove to our Puerto Rico operations, which has been reclassified as discontinued
    operations.
    Major Customers — Our Dairy Group and Specialty Foods Group segments each had one customer that represented greater than
10% of their 2004 sales. Approximately 13.1% of our consolidated 2004 sales were to that same customer. In addition, our
International Group had three customers that represented greater than 10% of their 2004 sales. Each of these customers represented
less than 1% of our consolidated sales.

21.     QUARTERLY RESULTS OF OPERATIONS (unaudited)
      The following is a summary of our unaudited quarterly results of operations for 2004 and 2003.
                                                                                                  Quarter
                                                           First                      Second                     Third                      Fourth
                                                                                      (In thousands, except share data)
2004
Net sales                                          $       2,452,151             $    2,806,564            $    2,772,495           $       2,791,075
Gross profit                                                 612,445                    638,198                   644,813                     669,073
Net income(1)(2)                                              69,240                     77,073                    40,192                      98,869
Earnings per common share(3):
   Basic                                                           0.44                        0.49                       0.26                       0.66
   Diluted                                                         0.43                        0.47                       0.25                       0.64
2003
Net sales                                          $       2,144,878             $    2,222,572            $    2,306,848           $       2,510,318
Gross profit                                                 571,233                    601,153                   593,537                     610,486
Net income(4)(5)                                              63,209                     83,789                   122,162                      86,543
Earnings per common share(3):
   Basic                                                           0.49                        0.60                       0.79                       0.56
   Diluted                                                         0.43                        0.54                       0.76                       0.54


(1) The results for the first, third and fourth quarters include facility closing and reorganization costs, net of tax, of $4.7 million,
    $12.5 million, and $3.8 million, respectively.
(2) The results for the third quarter of 2004 include a charge of $21.2 million, net of tax, related to the early extinguishment of debt.
    The results for the fourth quarter of 2004 include other operating income related to the settlement of litigation of $3.8 million,
    net of taxes.
(3) Earnings per common share calculations for each of the quarters were based on the basic and diluted weighted average number
    of shares outstanding for each quarter, and the sum of the quarters may not necessarily be equal to the full year earnings per
    common share amount.

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                                                      DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(4) The results for the first, second, third and fourth quarters include facility closing and reorganization costs, net of tax, of
    $(1.0) million, $1.9 million, $1.3 million and $5.2 million, respectively.
(5) The results for the third and fourth quarters include a gain on sale of the frozen pre-whipped topping and frozen creamer
    operations and income related to the divestiture of 11 facilities in 2001 of $40.9 million, net of tax, and $1.8 million net of tax,
    respectively.

22.   RELATED PARTY TRANSACTIONS
    Real Property Lease — We lease the land for our Franklin, Massachusetts facility from a partnership in which Alan Bernon, Chief
Operating Officer of the Northeast region of our Dairy Group and a member of our Board of Directors, owns a 13.45% minority
interest. (The remaining interests are owned by members of Mr. Bernon’s family.) Our lease payments were $700,000 in 2004, 2003
and 2002.
    Minority Interest in Consolidated Container Holding Company — We hold our minority interest in Consolidated Container
Company through our subsidiary Franklin Plastics, Inc., in which we own an approximately 99% interest. Alan Bernon, Chief
Operating Officer of the Northeast region of our Dairy Group and a member of our Board of Directors, and his brother, Peter Bernon,
collectively own less than 1% of Franklin Plastics, Inc. We spent approximately $235.5 million, $167.9 million and $128.7 million on
products purchased from CCC for the years ended December 31, 2004, 2003 and 2002, respectively. In the fourth quarter of 2004 we
purchased equipment previously owned and operated by CCC totaling $3.2 million.
    Aircraft Leases — On March 24, 2003, the independent members of our Board of Directors voted to purchase two companies from
Gregg Engles (our Chief Executive Officer and Chairman of our Board of Directors) and Pete Schenkel (President of our Dairy Group
and also a member of our Board of Directors). The companies owned two aircraft which we previously leased from them. As
consideration for the purchase of the lessor companies from Messrs. Engles and Schenkel, we assumed the indebtedness that the lessor
entities incurred to finance the purchase of the aircraft. No other consideration was paid to Mr. Engles or Mr. Schenkel, directly or
indirectly. The aggregate principal balance of the indebtedness that we assumed was approximately $9.6 million, which approximated
the then-current fair market value of the aircraft. Because the market value of the assets we acquired in the transaction was equal to the
value of the liabilities that we assumed, there was no income statement impact related to the transaction. Prior to the acquisition, we
paid the companies a combined total of $2.1 million during 2002 under the aircraft lease agreements.

23.   SUBSEQUENT EVENTS (unaudited)
   Tax Free Spin-Off of Specialty Foods Group — On January 27, 2005, we announced our intent to pursue a tax-free spin-off of our
Specialty Foods Group. The spin-off will create a publicly-traded food manufacturing company serving the retail grocery and
foodservice markets with approximately 1,800 employees and estimated 2005 net sales of over $700 million. Also effective
January 27, 2005, we hired a management team, headed by Sam Reed, former CEO of Keebler Foods Company, to lead the new
company. In conjunction with their employment, the management team made a cash investment of $10 million in the Specialty Foods
Group, representing 1.7% ownership of the new business.
   As part of the spin-off, we intend to transfer our Mocha Mix® non-dairy creamer, Second Nature® egg substitute and foodservice
dressings businesses to the Specialty Foods Group from WhiteWave Foods Company and our Dairy Group.
   The spin-off is intended to take the form of a tax-free distribution to our shareholders of a new publicly-traded stock, which we
expect to be listed on the New York Stock Exchange. We expect the spin-off to be completed in the third quarter of 2005, subject to
confirmation by the Internal Revenue Service of the tax-free nature of the transaction, registration of the new security with the
Securities and Exchange Commission and other customary closing conditions.

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                                                    DEAN FOODS COMPANY
                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

    Receivables-Backed Facility Amendment — On January 3, 2005, we amended our receivables-backed loan pursuant to which
(1) Horizon Organic and White Wave became parties to the facility, (2) the facility borrowing limit was increased to $600 million
from $500 million and (3) the facility termination date was extended to November 17, 2007.

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Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    During our two most recent fiscal years, no independent accountant who was engaged as the principal accountant to audit our
financial statements, nor any independent accountant who was engaged to audit a significant subsidiary and on whom our principal
accountant expressed reliance in its report, has resigned or been dismissed.

Item 9A. Controls and Procedures
Controls Evaluation and Related CEO and CFO Certifications
   We conducted an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures”
(“Disclosure Controls”) as of the end of the period covered by this annual report. The controls evaluation was done under the
supervision and with the participation of management, including our Chief Executive Officer (CEO) and Chief Financial Officer
(CFO).
    Attached as exhibits to this annual report are certifications of the CEO and the CFO, which are required in accordance with
Rule 13a-14 of the Exchange Act. This Controls and Procedures section includes the information concerning the controls evaluation
referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the
topics presented.

Definition of Disclosure Controls
    Disclosure Controls are controls and procedures designed to reasonably assure that information required to be disclosed in our
reports filed with the Securities and Exchange Commission (the “SEC”) is recorded, processed, summarized and reported within the
time periods specified in the SEC’s rules and forms. Disclosure Controls are also designed to reasonably assure that such information
is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions
regarding required disclosure. Our Disclosure Controls include components of our internal control over financial reporting, which
consists of control processes designed to provide reasonable assurance regarding the reliability of our financial reporting and the
preparation of financial statements in accordance with US generally accepted accounting principles.

Limitations on the Effectiveness of Controls
    We do not expect that our Disclosure Controls or our internal controls over financial reporting will prevent all error and all fraud.
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control
system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been
detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can
occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of
two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or
deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

Scope of the Controls Evaluation
   Our evaluations of our Disclosure Controls include reviews of the controls’ objectives and design, our implementation of the
controls and the effect of the controls on the information generated for use in our SEC filings. In the course of our controls
evaluations, we seek to identify data errors, controls problems or acts of

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fraud and confirm that appropriate corrective actions, including process improvements, are undertaken. Many of the components of
our Disclosure Controls are evaluated on an ongoing basis by our Audit Services department. The overall goals of these various
evaluation activities are to monitor our Disclosure Controls, and to modify them as necessary. Our intent is to maintain the Disclosure
Controls as dynamic systems that change as conditions warrant.

Conclusions
    Based upon our most recent controls evaluation, our CEO and CFO have concluded that as of the end of the period covered by this
annual report, our Disclosure Controls were effective at the reasonable assurance level. In the fourth quarter of 2004, there was no
change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.

                                                              PART III

Item 10.    Directors and Executive Officers
   Incorporated herein by reference to our proxy statement (to be filed) for our May 24, 2005 Annual Meeting of Stockholders.

Item 11.    Executive Compensation
   Incorporated herein by reference to our proxy statement (to be filed) for our May 24, 2005 Annual Meeting of Stockholders.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
   Incorporated herein by reference to our proxy statement (to be filed) for our May 24, 2005 Annual Meeting of Stockholders.

Item 13.    Certain Relationships and Related Transactions
   Incorporated herein by reference to our proxy statement (to be filed) for our May 24, 2005 Annual Meeting of Stockholders.

Item 14.    Principal Accountant Fees and Services
   Incorporated herein by reference to our proxy statement (to be filed) for our May 24, 2005 Annual Meeting of Stockholders.

                                                                  54




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                                                              PART IV

Item 15.   Exhibits and Financial Statement Schedules
Financial Statements
   The following Consolidated Financial Statements are filed as part of this report or are incorporated herein as indicated:

                                                                                                                               Page
Management Report on Internal Controls Over Financial Reporting                                                                 F-1
Report of Independent Registered Public Accounting Firm                                                                         F-2
Consolidated Balance Sheets as of December 31, 2004 and 2003                                                                    F-4
Consolidated Statements of Income for the years ended December 31, 2004, 2003 and 2002                                          F-5
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2004, 2003 and 2002                            F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002                                      F-7
Notes to Consolidated Financial Statements                                                                                      F-8


Financial Statement Schedules
   Report of Independent Registered Public Accounting Firm
   Schedule II — Valuation and Qualifying Accounts

Exhibits
   See Index to Exhibits.

                                                                  55




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   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.




                                                                           By: /s/ RONALD L. MCCRUMMEN
                                                                                   Ronald L. McCrummen
                                                                                 Senior Vice President and
                                                                                  Chief Accounting Officer

Dated March 16, 2005
    Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.
                               Name                                                       Title                             Date

                      /s/ GREGG L. ENGLES                               Chief Executive Officer and Chairman of        March 16, 2005
                           Gregg L. Engles                                             the Board

                    /s/ BARRY A. FROMBERG                                  Executive Vice President and Chief          March 16, 2005
                         Barry A. Fromberg                                         Financial Officer

                /s/ RONALD L. MCCRUMMEN                                    Senior Vice President and Chief             March 16, 2005
                     Ronald L. McCrummen                               Accounting Officer (Principal Accounting
                                                                                       Officer)

                        /s/ ALAN BERNON                                                 Director                       March 16, 2005
                             Alan Bernon

                     /s/ LEWIS M. COLLENS                                               Director                       March 16, 2005
                          Lewis M. Collens

                          /s/ TOM DAVIS                                                 Director                       March 16, 2005
                              Tom Davis

                     /s/ STEPHEN L. GREEN                                               Director                       March 16, 2005
                          Stephen L. Green

                          /s/ JANET HILL                                                Director                       March 16, 2005
                               Janet Hill

                    /s/ JOSEPH S. HARDIN, JR.                                           Director                       March 16, 2005
                         Joseph S. Hardin, Jr.

                           /s/ RON KIRK                                                 Director                       March 16, 2005
                               Ron Kirk

                 /s/ JOHN S. LLEWELLYN, JR.                                             Director                       March 16, 2005
                       John S. Llewellyn, Jr.

                                                                 S-1




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                              Name                    Title         Date

                         /s/ JOHN MUSE              Director   March 16, 2005
                             John Muse

                    /s/ HECTOR M. NEVARES           Director   March 16, 2005
                         Hector M. Nevares

                     /s/ P. EUGENE PENDER           Director   March 16, 2005
                          P. Eugene Pender

                      /s/ PETE SCHENKEL             Director   March 16, 2005
                           Pete Schenkel

                        /s/ JIM TURNER              Director   March 16, 2005
                            Jim Turner

                                              S-2




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                         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Dean Foods Company
Dallas, Texas
    We have audited the consolidated financial statements of Dean Foods Company and subsidiaries (the “Company”) as of
December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004, management’s assessment of the
effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, and the effectiveness of the
company’s internal control over financial reporting as of December 31, 2004, and have issued our report thereon dated March 14,
2005 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the change in 2002 in the
method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standard No. 142);
such report is included elsewhere in this Form 10-K. Our audits also included the consolidated financial statement schedule of the
Company listed in Item 15. This consolidated financial statement schedule is the responsibility of the Company’s management. Our
responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when
considered in relation to the consolidated financial statements taken as a whole, presents fairly in all material respects, the information
set forth therein.


DELOITTE & TOUCHE LLP

Dallas, Texas
March 14, 2005




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                                                                                                                    SCHEDULE II

                                      DEAN FOODS COMPANY AND SUBSIDIARIES
                                       VALUATION AND QUALIFYING ACCOUNTS
                                        Years Ended December 31, 2004, 2003 and 2002
   Allowance for doubtful accounts deducted from accounts receivable:
                         Balance                                                      Recoveries    Write-Off of
                        Beginning      Charged to                                     of Accounts   Uncollectible     Balance
        Year             of Year        Income        Acquisitions   Dispositions     Written Off    Accounts        End of Year
                                                                     (In thousands)
2002                   $ 28,151       $   18,985      $    1,716        $   38        $    1,129    $    15,626      $   34,317
2003                     34,317            8,143             881            —              1,733         12,390          32,684
2004                     32,684             (752)          2,052            —              2,251         12,012          24,233




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                                                    INDEX TO EXHIBITS

        Exhibit
        Number                                                               Description
            3.1           —        Amended and Restated Certificate of Incorporation (incorporated by reference from our Annual
                                   Report on Form 10-K for the year ended December 31, 2001, filed April 1, 2002 (File
                                   No. 1-12755)).
            3.2           —        Amended and Restated Bylaws (incorporated by reference from our Quarterly Report on Form
                                   10-Q for the quarter ended June 30, 1999 (File No. 1-12755)).
            4.1           —        Specimen of Common Stock Certificate (incorporated by reference from our Annual Report on
                                   Form 10-K for the year ended December 31, 2001, filed April 1, 2002 (File No. 1-12755)).
            4.2           —        Registration Rights Agreement (incorporated by reference from our Registration Statement on
                                   Form S-1 (File No. 333-1858)).
            4.3           —        Rights Agreement dated March 6, 1998 among us and Harris Trust & Savings Bank, as rights
                                   agent, which includes as Exhibit A the Form of Rights Certificate (incorporated by reference
                                   from the Registration Statement on Form 8-A filed on March 10, 1998 (File No. 1-12755)).
            4.4           —        Amendment No. 1 to Rights Agreement dated May 26, 2004 by and between us and The Bank of
                                   New York, as rights agent (incorporated by reference from our Current Report on Form 8-K
                                   dated May 27, 2004 (Filed No. 1-12755)).
          *10.1           —        Seventh Amended and Restated 1997 Stock Option and Restricted Stock Plan (filed herewith).
          *10.2           —        Third Amended and Restated 1989 Dean Foods Stock Awards Plan (filed herewith).
          *10.3           —        Amended and Restated Executive Deferred Compensation Plan (incorporated by reference from
                                   our Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 1-12755)).
          *10.4           —        Post-2004 Executive Deferred Compensation Plan (filed herewith).
          *10.5           —        Fourth Amended and Restated 1997 Employee Stock Purchase Plan (incorporated by reference
                                   from our Annual Report on Form 10-K for the year ended December 31, 2003 (File
                                   No. 1-12755)).
          *10.6           —        Executive Incentive Compensation Plan (filed herewith).
          *10.8           —        Supplemental Executive Retirement Plan (filed herewith).
          *10.9           —        Description of Compensation Arrangements for Executive Officers (filed herewith).
          *10.10          —        Summary of Compensation Paid to Non-Employee Directors (filed herewith).
          *10.11          —        Form of stock option award agreement for awards to executive officers (incorporated by
                                   reference from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 (File No.
                                   1-12755)).
          *10.12          —        Form of stock unit award agreement for awards to executive officers (incorporated by reference
                                   from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 (File No.
                                   1-12755)).
          *10.13          —        Employment Agreement dated January 27, 2005 between Treehouse Foods, Inc. (our
                                   wholly-owned subsidiary) and Sam K. Reed (filed herewith).
          *10.14          —        Employment Agreement dated January 27, 2005 between Treehouse Foods, Inc. (our
                                   wholly-owned subsidiary) and David B. Vermylen (filed herewith).
          *10.15          —        Employment Agreement dated January 27, 2005 between Treehouse Foods, Inc. (our
                                   wholly-owned subsidiary) and E. Nichol McCully (filed herewith).
          *10.16          —        Employment Agreement dated January 27, 2005 between Treehouse Foods, Inc. (our
                                   wholly-owned subsidiary) and Thomas E. O’Neill (filed herewith).
          *10.17          —        Employment Agreement dated January 27, 2005 between Treehouse Foods, Inc. (our
                                   wholly-owned subsidiary) and Harry J. Walsh (filed herewith).
          *10.18          —        Form of Change in Control Agreement for certain of our executive officers (incorporated by
                                   reference from our Annual Report on Form 10-K for the year ended December 31, 2002 (File No.
                                   1-12755)).
          *10.19          —        Form of Change in Control Agreement for certain executive and other senior officers
                                   (incorporated by reference from our Annual Report on Form 10-K for the year ended December
                                   31, 2002 (File No. 1-12755)).




Source: DEAN FOODS CO, 10-K, March 16, 2005
Table of Contents

   Exhibit
   Number                                                                    Description
          *10.20          —        Form of Change in Control Agreement for certain other officers (incorporated by reference from
                                   our Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 1-12755)).
             10.21        —        Stockholders Agreement dated July 31, 1997 among us, Franklin Plastics, Peter M. Bernon and
                                   Alan J. Bernon (incorporated by reference from our Quarterly Report on Form 10-Q for the
                                   quarter ended June 30, 1997, as amended on October 24, 1997 (File No. 1-12755)).
             10.22        —        Amended and Restated Limited Liability Company Agreement of Consolidated Container
                                   Holdings, LLC (incorporated by reference from our Current Report on Form 8-K dated July 19,
                                   1999, (File No. 1-12755)).
             10.23        —        Amended and Restated Credit Agreement among us and our senior lenders (incorporated by
                                   reference from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004
                                   (File No. 1-12755)).
             10.24        —        Third Amended and Restated Receivables Purchase Agreement related to our receivables-backed
                                   loan (incorporated by reference from our Annual Report on Form 10-K for the year ended
                                   December 31, 2003 (File No. 1-12755)).
             10.25        —        First Amendment to Third Amended and Restated Receivables Purchase Agreement
                                   (incorporated by reference from our Annual Report on Form 10-K for the year ended
                                   December 31, 2003 (File No. 1-12755)).
             10.26        —        Second Amendment to Third Amended and Restated Receivables Purchase Agreement (filed
                                   herewith).
             10.27        —        Third Amendment to Third Amended and Restated Receivables Purchase Agreement (filed
                                   herewith).
             10.28        —        Fourth Amendment to Third Amended and Restated Receivables Purchase Agreement
                                   (incorporated by reference from our Current Report on Form 8-K dated November 22, 2004 (File
                                   No. 1-12755)).
             10.29        —        Fifth Amendment to Third Amended and Restated Receivables Purchase Agreement
                                   (incorporated by reference from our Current Report on Form 8-K dated January 7, 2005 (File No.
                                   1-12755)).
             10.30        —        Stockholders Agreement dated January 27, 2005 between us, TreeHouse Foods, Inc. (our
                                   wholly-owned subsidiary), Sam K. Reed, David B. Vermylen, E. Nichol McCully, Thomas E.
                                   O’Neill and Harry J. Walsh regarding their investments in our Specialty Foods Group (filed
                                   herewith).
             10.31        —        Form of Subscription Agreements entered into between TreeHouse Foods, Inc. (our
                                   wholly-owned subsidiary) and each of Sam K. Reed, David B. Vermylen, E. Nichol McCully,
                                   Thomas E. O’Neill and Harry J. Walsh regarding their investments in our Specialty Foods Group
                                   (filed herewith).
             21           —        List of Subsidiaries (filed herewith).
             23.1         —        Consent of Deloitte & Touche LLP (filed herewith).
             31.1         —        Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
                                   2002 (filed herewith).
             31.2         —        Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
                                   2002 (filed herewith).
             32.1         —        Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
                                   2002 (filed herewith).
             32.2         —        Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
                                   2002 (filed herewith).


* Management or compensatory contract




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                   EXHIBIT 10.1


             (DEAN FOODS(TM) LOGO)

                                               DEAN FOODS COMPANY
                                          SEVENTH AMENDED AND RESTATED
                                   1997 STOCK OPTION AND RESTRICTED STOCK PLAN

                  1. Purpose of the Plan. This Plan shall be known as the Dean Foods Company
             Seventh Amended and Restated 1997 Stock Option and Restricted Stock Plan. The
             purpose of the Plan is to attract and retain the best available persons for
             positions of substantial responsibility and to provide incentives to such
             persons to promote the success of the business of Dean Foods Company and its
             subsidiaries.

                  Certain options granted under this Plan are intended to qualify as
             "incentive stock options" pursuant to Section 422 of the Internal Revenue Code
             of 1986, as amended from time to time.

                   2. Definitions. As used herein, the following definitions shall apply:

                         "Authorized Officers" shall have the meaning set forth in Section 19
             hereof.

                         "Board" means the Board of Directors of the Company.

                        "Change in Control" means (1) any "person" (as such term is used in
             Section 13(d) of the Exchange Act, but specifically excluding the Company, any
             wholly-owned subsidiary of the Company, and/or any employee benefit plan
             maintained by the Company or any wholly-owned subsidiary of the Company) becomes
             the "beneficial owner" (as determined pursuant to Rule 13d-3 under the Exchange
             Act), directly or indirectly, of securities of the Company representing thirty
             percent (30%) or more of the combined voting power of the Company's then
             outstanding securities; or (2) during any period of two (2) consecutive years
             (not including any period prior to the effective date of this amendment and
             restatement), individuals who at the beginning of such period constitute the
             members of the Board and any new director, whose election to the Board or
             nomination for election to the Board by the Company's stockholders was approved
             by a vote of at least two-thirds (2/3) of the directors then still in office who
             either were directors at the beginning of the period or whose election or
             nomination for election was previously so approved, cease for any reason to
             constitute a majority of the Board; or (3) the Company or any Subsidiary shall
             merge with or consolidate into any other company, other than a merger or
             consolidation which would result in the holders of the voting securities of the
             Company outstanding immediately prior thereto holding immediately thereafter
             securities representing more than sixty percent (60%) of the combined voting
             power of the voting securities of the Company or such surviving entity (or its
             ultimate parent, if applicable) outstanding immediately after such merger or
             consolidation; or (4) the stockholders of the Company approve a plan of complete
             liquidation of the Company or an agreement for the sale or disposition by the
             Company of all or substantially all of the Company's assets or such a plan is
             commenced.

                       "Code" means the Internal Revenue Code of 1986, as amended from time
             to time, and any successor statute.



                       "Committee" means the committee described in Section 19 that
             administers the Plan or, if no such committee has been appointed, the full
             Board.

                       "Common Stock" means the common stock, $.01 par value per share, of
             the Company. Except as otherwise provided herein, all Common Stock issued
             pursuant to this Plan shall have the same rights as all other issued and
             outstanding shares of Common Stock, including but not limited to voting rights,
             the right to dividends, if declared and paid, and the right to pro rata
             distributions of the Company's assets in the event of liquidation.

                       "Company" means Dean Foods Company, a Delaware corporation, formerly
             known as Suiza Foods Corporation.

                       "Consultant" means any consultant or advisor who renders bona fide
             services to the Company or one of its Subsidiaries, which services are not in
             connection with the offer or sale of securities in a capital-raising
             transaction.

                         "Date of Grant" shall have the meaning set forth in Section 8 hereof.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                       "Employee" means any officer or other key employee of the Company or
             one of its Subsidiaries (including any director who is also an officer or key
             employee of the Company or one of its Subsidiaries).

                         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

                         "Exercise Price" shall have the meaning set forth in Section 9 hereof.

                       "Fair Market Value" means the closing sale price (or average of the
             quoted closing bid and asked prices if there is no closing sale price reported)
             of the Common Stock on the date specified as reported by the principal national
             exchange or trading system on which the Common Stock is then listed or traded.
             If there is no reported price information for the Common Stock, the Fair Market
             Value will be determined by the Board or the Committee, in its sole discretion.
             In making such determination, the Board or the Committee may, but shall not be
             obligated to, commission and rely upon an independent appraisal of the Common
             Stock.

                         "Immediate Family Members" shall have the meaning set forth in Section
             15 hereof.

                       "Non-Employee Director" means an individual who is a "non-employee
             director" as defined in Rule 16b-3 under the Exchange Act and an "outside
             director" within the meaning of Treasury Regulation Section 1.162-27(e)(3).

                         "Nonqualified Option" means any Option that is not a Qualified Option.

                         "Option" means a stock option granted pursuant to Section 6 of this
             Plan.

                       "Optionee" means any Employee, Consultant or Non-Employee Director who
             receives an Option.


                                                       2



                       "Participant" means any Employee, Consultant or Non-Employee Director
             who receives an Option or Restricted Stock pursuant to this Plan.

                       "Qualified Option" means any Option that is intended to qualify as an
             "incentive stock option" within the meaning of Section 422 of the Code.

                       "Qualifying Retirement" means retirement by a Participant from
             employment or other service to the Company or any Subsidiary after such
             Participant reaches the age of 65.

                       "Restricted Stock" means Common Stock awarded to an Employee,
             Consultant or Non-Employee Director pursuant to Section 7 of this Plan.

                         "Restricted Stock Cap" shall have the meaning set forth in Section 7
             hereof.

                       "Rule 16b-3" means Rule 16b-3 of the rules and regulations under the
             Exchange Act, as Rule 16b-3 may be amended from time to time, and any successor
             provisions to Rule 16b-3 under the Exchange Act.

                       "Subsidiary" means any now existing or hereinafter organized or
             acquired company of which more than fifty percent (50%) of the issued and
             outstanding voting interests are owned or controlled directly or indirectly by
             the Company or through one or more Subsidiaries of the Company.

                         "10-Percent Stockholder" shall have the meaning set forth in Section 9
             hereof.

                  3. Term of Plan. The Plan has been adopted by the Board effective as of
             February 24, 1997 and approved by the stockholders of the Company. The Plan
             shall continue in effect until terminated pursuant to Section 19.

                  4. Shares Subject to the Plan. Except as otherwise provided in Section 18
             hereof, the aggregate number of shares of Common Stock issuable upon the
             exercise of Options or upon the grant of Restricted Stock pursuant to this Plan
             shall be 37,500,000 shares; provided that any individual grant may not exceed,
             in the case of Options, 1,000,000 Options, and, in the case of Restricted Stock,
             225,000 shares. Such shares may either be authorized but unissued shares or
             treasury shares. The Company shall, during the term of this Plan, reserve and
             keep available a number of shares of Common Stock sufficient to satisfy the
             requirements of the Plan. If an Option should expire or become unexercisable for

Source: DEAN FOODS CO, 10-K, March 16, 2005
             any reason without having been exercised in full, or Restricted Stock should
             fail to vest and be forfeited in whole or in part for any reason, then the
             shares that were subject thereto shall, unless the Plan has terminated, be
             available for the grant of additional Options or Restricted Stock under this
             Plan, subject to the limitations set forth above and in Section 19 hereof.

                  5. Eligibility. Qualified Options may be granted under Section 6 of the
             Plan to such Employees of the Company or its Subsidiaries as may be determined
             by the Board or the Committee (or the Authorized Officers, to the extent
             permitted by Section 19 of this Plan). Nonqualified Options may be granted under
             Section 6 of the Plan to such Employees, Consultants and Non-Employee Directors
             of the Company or its Subsidiaries as may be


                                                     3



             determined by the Board or the Committee (or the Authorized Officers, to the
             extent permitted by Section 19 of this Plan). Restricted Stock may be granted
             under Section 7 of the Plan to such Employees, Consultants and Non-Employee
             Directors of the Company or its Subsidiaries as may be determined by the Board
             or the Committee (or the Authorized Officers, to the extent permitted by Section
             19 of this Plan).

                  6. Grant of Options. (a) Except as limited by Section 4 hereof, the Board
             or the Committee shall determine the number of shares of Common Stock to be
             offered from time to time pursuant to Options granted hereunder and shall grant
             Options under the Plan. In connection with the granting of Qualified Options,
             the aggregate Fair Market Value (determined at the Date of Grant of a Qualified
             Option) of the shares with respect to which Qualified Options are exercisable
             for the first time by an Optionee during any calendar year (under all such plans
             of the Optionee's employer company and its parent and subsidiary corporations as
             defined in Section 424(e) and (f) of the Code, or a corporation or a parent or
             subsidiary corporation of such corporation issuing or assuming an Option in a
             transaction to which Section 424(a) of the Code applies) shall not exceed
             $100,000 or such other amount as from time to time provided in Section 422(d) of
             the Code or any successor provision. The grant of Options shall be evidenced by
             Option agreements containing such terms and provisions as are approved by the
             Board or the Committee and executed on behalf of the Company by an appropriate
             officer.

                       (b) Unless the Board or the Committee determines otherwise with
             respect to a particular year, each Non-Employee Director will automatically be
             granted a fully vested Nonqualified Option to purchase 7,500 shares of Common
             Stock (subject to adjustment pursuant to Section 18 hereof), at an exercise
             price equal to the Fair Market Value of the Common Stock on the Date of Grant,
             on June 30 of each year.

                  7. Restricted Stock. The Board or the Committee shall from time to time
             determine the number of shares of Common Stock to be granted as Restricted
             Stock; provided that no more than an aggregate amount of 225,000 shares of
             Restricted Stock may be issued under the Plan (such limit being herein referred
             to as the "Restricted Stock Cap"). Any shares of Restricted Stock that fail to
             vest and are forfeited shall not count against the Restricted Stock Cap set
             forth in the preceding sentence. The grant of Restricted Stock shall be
             evidenced by Restricted Stock agreements containing such terms and provisions as
             are approved by the Board or the Committee and executed on behalf of the Company
             by an appropriate officer.

                  8. Date of Grant. The date of grant of an Option or Restricted Stock under
             the Plan (the "Date of Grant") shall be the date on which the Board or the
             Committee awards the Option or Restricted Stock or, if the Board or the
             Committee so determines, the date specified by the Board or the Committee as the
             date the award is to be effective. Notice of the grant shall be given to each
             Participant to whom an Option or Restricted Stock is granted promptly after the
             date of such grant.

                  9. Price. The exercise price for each share of Common Stock subject to an
             Option (the "Exercise Price") granted pursuant to Section 6 of the Plan shall be
             determined by the Board or the Committee at the Date of Grant; provided,
             however, that (a) the Exercise Price for any Option shall not be less than 100%
             of the Fair Market Value of the Common Stock on the day before the Date of
             Grant, and (b) if the Optionee owns on the Date of Grant more than 10 percent of
             the total combined voting power of all classes of stock of the Company or its
             parent or any of


                                                     4


Source: DEAN FOODS CO, 10-K, March 16, 2005
             its subsidiaries, as more fully described in Section 422(b)(6) of the Code or
             any successor provision (such stockholder is referred to herein as a "10-Percent
             Stockholder"), the Exercise Price for any Qualified Option granted to such
             Optionee shall not be less than 110% of the Fair Market Value of the Common
             Stock on the day before the Date of Grant. The Board or the Committee in its
             discretion may award shares of Restricted Stock under Section 7 of the Plan to
             Participants without requiring the payment of cash consideration for such
             shares.

                  10. Vesting. (a) Subject to the provisions of this Plan, each Option and
             Restricted Stock award under the Plan shall vest or be subject to forfeiture in
             accordance with the provisions set forth in the applicable Option agreement or
             Restricted Stock agreement. If no vesting provisions are set forth in an award
             agreement, the award shall vest ratably over a three-year period.

                       (b) In addition to the vesting provisions contained in each Option and
             Restricted Stock agreement, each Option and share of Restricted Stock granted
             under the Plan shall also be subject to the following vesting provisions:

                            (i) Each unvested Option and share of Restricted Stock shall
             immediately vest in full upon the death of the holder of such Option or
             Restricted Stock;

                            (ii) Each unvested Option and share of Restricted Stock shall
             immediately vest in full upon any Change in Control;

                            (iii) Each unvested Option and share of Restricted Stock shall
             immediately vest in full upon the permanent and total disability (as defined
             within the meaning of Section 22(e)(3) of the Code) of the holder of such Option
             or Restricted Stock; and

                            (iv) In the event of the Qualifying Retirement of a Participant,
             all unvested Options and shares of Restricted Stock held by such Participant
             shall automatically vest in full as of the effective date of such Participant's
             Qualifying Retirement.

                  11. Exercise. (a) An Option will not be deemed to be exercised and shares
             will not be issued, until the applicable Exercise Price is received by the
             Company. A Participant may pay the Exercise Price of an Option by the delivery
             of cash, check or wire transfer, or in shares of Common Stock already owned by
             the Participant, or a combination of the foregoing having a total Fair Market
             Value on the date of payment equal to the total Exercise Price. The Committee
             shall determine acceptable methods for tendering Common Stock as payment upon
             exercise of an Option and may impose such limitations and prohibitions on the
             use of the Common Stock for such purpose as it deems appropriate.

                       (b) If the shares to be purchased are covered by an effective
             registration statement under the Securities Act of 1933, as amended, any Option
             may be exercised by a broker-dealer acting on behalf of an Optionee if (i) the
             broker-dealer has received from the Company confirmation of the existence and
             validity of the Option to be exercised, together with instructions from the
             Optionee requesting the Company to deliver the shares of Common Stock subject to
             such Option to the broker-dealer on behalf of the Optionee and specifying the
             account into which such shares should be deposited, (ii) adequate provision has
             been made with respect to the payment of any withholding taxes due upon such
             exercise, and (iii) the broker-dealer and


                                                     5



             the Optionee have otherwise complied with Section 220.3(e)(4) of Regulation T,
             12 CFR Part 220, or any successor provision, and any other applicable
             regulations.

                  12. Expiration of Options. (a) No Option shall be exercisable at any time
             after the expiration of ten (10) years from the Date of Grant; provided,
             however, that if the Optionee with respect to a Qualified Option is a 10-Percent
             Stockholder on the Date of Grant of such Qualified Option, then such Option
             shall not be exercisable after the expiration of five (5) years from its Date of
             Grant.

                       (b) In addition, if an Optionee ceases to be an Employee or
             Non-Employee Director of the Company or any Subsidiary for any reason, such
             Optionee's vested Options shall expire on the earlier of (1) the expiration date
             contained in the corresponding Option Agreement, or (2) (a) 60 days following
             the date such Optionee ceases to be an Employee or Non-Employee Director of the

Source: DEAN FOODS CO, 10-K, March 16, 2005
             Company or any Subsidiary, if such cessation of service is not due to the death,
             Qualifying Retirement or permanent and total disability (within the meaning of
             Section 22(e)(3) of the Code) of the Optionee, (b) 12 months following the date
             such Optionee ceases to be an Employee or Non-Employee Director of the Company
             or any Subsidiary, if such cessation of service is due to the death or permanent
             and total disability (as defined above) of the Optionee, or (c) such later date
             as may be set forth in the corresponding option agreement. Options held by an
             Optionee who has retired pursuant to a Qualifying Retirement will remain
             exercisable until the earlier of (i) the tenth anniversary of the date the
             Option was granted, and (ii) the first anniversary of the Optionee's death. Upon
             the death of an Optionee, any vested Option exercisable on the date of death may
             be exercised by the Optionee's estate or by a person who acquires the right to
             exercise such Option by bequest or inheritance or by reason of the death of the
             Optionee, provided that such exercise occurs within the shorter of the remaining
             option term of the Option and 12 months after the date of the Optionee's death.
             Notwithstanding the foregoing, Qualified Options may only be exercised during
             the Participant's lifetime, by the Participant.

                       (c) Notwithstanding any provision of this Plan or any Option Agreement
             to the contrary, no Optionee may, under any circumstances, exercise a vested
             Option following termination of employment if the Optionee is discharged due to
             the Optionee's willful or intentional fraud, embezzlement or other conduct
             seriously detrimental to the Company or any Subsidiary. The determination of
             whether or not an Optionee has been discharged for any of the reasons specified
             in the preceding sentence will be made by the Committee or the Board.

                  13. Option Financing. Upon the exercise of any Option granted under the
             Plan, the Company may, but shall not be required to, make financing available to
             the Participant for the purchase of shares of Common Stock pursuant to such
             Option on such terms as the Board or the Committee may specify.

                  14. Withholding of Taxes. The Board or the Committee shall make such
             provisions and take such steps as it may deem necessary or appropriate for the
             withholding of any taxes that the Company is required by any law or regulation
             of any governmental authority to withhold in connection with any Option or
             Restricted Stock including, but not limited to, withholding the issuance of all
             or any portion of the shares of Common Stock subject to such Option or
             Restricted Stock until the Participant reimburses the Company for the amount it
             is required to withhold with respect to such taxes, canceling any portion of
             such issuance in an amount


                                                     6



             sufficient to reimburse the Company for the amount it is required to withhold or
             taking any other action reasonably required to satisfy the Company's withholding
             obligation.

                  15. Conditions Upon Issuance of Shares. (a) The Company shall not be
             obligated to sell or issue any shares upon the exercise of any Option granted
             under the Plan or to deliver Restricted Stock unless the issuance and delivery
             of shares complies with all provisions of applicable federal and state
             securities laws and the requirements of any national exchange or trading system
             on which the Common Stock is then listed or traded.

                       (b) As a condition to the exercise of an Option or the grant of
             Restricted Stock, the Company may require the person exercising the Option or
             receiving the grant of Restricted Stock to make such representations and
             warranties as may be necessary to assure the availability of an exemption from
             the registration requirements of applicable federal and state securities laws.

                       (c) The Company shall not be liable for refusing to sell or issue any
             shares covered by any Option or for refusing to issue Restricted Stock if the
             Company cannot obtain authority from the appropriate regulatory bodies deemed by
             the Company to be necessary to sell or issue such shares in compliance with all
             applicable federal and state securities laws and the requirements of any
             national exchange or trading system on which the Common Stock is then listed or
             traded. In addition, the Company shall have no obligation to any Participant,
             express or implied, to list, register or otherwise qualify the shares of Common
             Stock covered by any Option or Restricted Stock.

                       (d) No Participant will be, or will be deemed to be, a holder of any
             Common Stock subject to an Option unless and until the Option is vested, and the
             Participant has exercised the Option and paid the purchase price for the subject
             shares of Common Stock. Options and shares of Restricted Stock that have not
             fully vested shall be transferable only by will or the laws of descent and
             distribution and Options shall be exercisable during the Participant's lifetime
             only by such Participant; provided, however, that the Participant may transfer

Source: DEAN FOODS CO, 10-K, March 16, 2005
             his or her Options and/or unvested Restricted Stock without consideration, to
             (i) the spouse, children or grandchildren of the Participant ("Immediate Family
             Members"), (ii) a trust or trusts, or to a guardian under the Uniform Gift to
             Minors Act, for the exclusive benefit of such Immediate Family Members, or (iii)
             a partnership or other entity in which such Immediate Family Members are the
             only partners, provided that subsequent transfers of transferred Options or
             unvested shares of Restricted Stock shall be prohibited except by will or the
             laws of descent and distribution. Following transfer, any such Options and/or
             unvested shares of Restricted Stock shall continue to be subject to the same
             terms and conditions as were applicable immediately prior to transfer, provided
             that, for purposes of each award agreement and the vesting and expiration
             provisions thereof, the terms "Participant" and "Optionee" shall be deemed to
             refer to the transferee (however, the events of termination of employment, if
             any, set forth in the agreement and the obligation to pay withholding taxes
             shall continue to apply to the transferor). Notwithstanding the foregoing,
             Qualified Options shall be nontransferable except by will or the laws of descent
             and distribution, and may only be exercisable during the Participant's lifetime,
             by the Participant.

                  16. Restrictions on Shares. Shares of Common Stock issued pursuant to the
             Plan may be subject to restrictions on transfer under applicable federal and
             state securities laws. The Board may impose such additional restrictions on the
             ownership and transfer of shares of


                                                     7



             Common Stock issued pursuant to the Plan as it deems desirable; any such
             restrictions shall be set forth in any award agreement entered into hereunder.

                  17. Modification of Awards. At any time and from time to time, the Board or
             the Committee may execute an instrument providing for modification, extension or
             renewal of any outstanding award, provided that no such modification, extension
             or renewal shall (a) impair any award without the consent of the holder of the
             award, or (b) decrease the exercise price of any Option without the consent of
             the stockholders of the Company. Notwithstanding the foregoing, in the event of
             a modification, extension or renewal of a Qualified Option, the Board or the
             Committee may increase the exercise price of such Option if necessary to retain
             the qualified status of such Option. Any amendment to the Plan shall apply to
             all Options and shares of Restricted Stock outstanding at the time of such
             amendment in addition to all awards granted thereafter, subject to the
             limitations of clause (a) of the first sentence of this Section 17, but in no
             event shall it apply to any Qualified Option if such action would cause the
             Qualified Option to lose its tax-advantaged status.

                  18. Effect of Change in Stock Subject to the Plan. In the event that each
             of the outstanding shares of Common Stock (other than shares held by dissenting
             stockholders) shall be changed into or exchanged for a different number or kind
             of shares of stock of the Company or of another company (whether by reason of
             merger, consolidation, recapitalization, reclassification, split-up, combination
             of shares or otherwise), or in the event a stock split or stock dividend or
             similar transaction occurs, then there shall be substituted for each share of
             Common Stock then subject to Options or Restricted Stock awards or available for
             Options or Restricted Stock awards, the number and kind of shares of stock into
             which each outstanding share of Common Stock (other than shares held by
             dissenting stockholders) shall be so changed or exchanged, or the number of
             shares of Common Stock as is equitably required in the event of a stock split or
             stock dividend or similar transaction, together with an appropriate adjustment
             of the Exercise Price. The Board may, but shall not be required to, provide
             additional anti-dilution protection to a Participant under the terms of the
             Participant's Option or Restricted Stock agreement.

                  19. Administration. (a) The Plan shall be administered by the Board or by a
             committee of the Board comprised solely of two or more Non-Employee Directors
             appointed by the Board who meet the independence standard established from time
             to time by the New York Stock Exchange (the "Committee"). Options and Restricted
             Stock may be granted under Sections 6 and 7, respectively, (i) by the Board as a
             whole, or (ii) by majority agreement of the members of the Committee. Subject to
             the limitations and qualifications set forth in this Plan, the Board or the
             Committee shall determine the number of Options or shares of Restricted Stock to
             be granted to each Participant, the number of shares subject to each Option or
             Restricted Stock grant, the exercise price or prices of each Option, the vesting
             and exercise period of each Option and the vesting and/or forfeiture provisions
             relating to Restricted Stock, whether an Option may be exercised as to less than
             all of the Common Stock subject thereto, and such other terms and conditions of
             each Option or grant of Restricted Stock, if any, as are consistent with the
             provisions of this Plan. To the extent permitted by applicable law (including
             the Exchange Act and the Code), the Board or the Committee may at any given time

Source: DEAN FOODS CO, 10-K, March 16, 2005
             authorize an aggregate number of Options or shares of Restricted Stock to be
             granted to eligible Employees, and then authorize one or more officers of the
             Company (the "Authorized Officers") to allocate such awards among eligible
             Employees; provided that the Authorized Officers may not allocate awards to
             themselves or other executive officers, and the terms of the awards, including
             the Exercise Price (if any)


                                                     8



             must be established by the Board or the Committee. Option agreements and
             Restricted Stock agreements, in the forms as approved by the Board or the
             Committee, and containing such terms and conditions consistent with the
             provisions of this Plan as are determined by the Board or the Committee, may be
             executed on behalf of the Company by the Chairman of the Board, the President or
             any Vice President of the Company. The Board or the Committee shall have
             complete authority to construe, interpret and administer the provisions of this
             Plan and the provisions of the Option agreements and Restricted Stock agreements
             granted hereunder; to prescribe, amend and rescind rules and regulations
             pertaining to this Plan; to suspend or discontinue this Plan; and to make all
             other determinations necessary or deemed advisable in the administration of the
             Plan. The determinations, interpretations and constructions made by the Board or
             the Committee shall be final and conclusive. No member of the Board or the
             Committee shall be liable for any action taken, or failed to be taken, made in
             good faith relating to the Plan or any award thereunder, and the members of the
             Board or the Committee shall be entitled to indemnification and reimbursement by
             the Company in respect of any claim, loss, damage or expense (including
             attorneys' fees) arising therefrom to the fullest extent permitted by law.

                       (b) Although the Board or the Committee may suspend or discontinue the
             Plan at any time, all Qualified Options must be granted before February 24,
             2007.

                       (c) Subject to any applicable requirements of Rule 16b-3 or of any
             national exchange or trading system on which the Common Stock is then listed or
             traded, and subject to the stockholder approval requirements of Sections 422 and
             162(m)(4)(C) of the Code, the Board may amend any provision of this Plan in any
             respect in its discretion.

                  20. Continued Employment Not Presumed. Nothing in this Plan or any document
             describing it nor the grant of any Option or Restricted Stock shall give any
             Participant the right to continue in the employment of the Company or affect the
             right of the Company to terminate the employment of any such person with or
             without cause.

                   21. Liability of the Company. Neither the Company, its directors, officers
             or employees or the Committee, nor any Subsidiary which is in existence or
             hereafter comes into existence, shall be liable to any Participant or other
             person if it is determined for any reason by the Internal Revenue Service or any
             court having jurisdiction that any Qualified Option granted hereunder does not
             qualify for tax treatment as an incentive stock option under Section 422 of the
             Code.

                  22. GOVERNING LAW. THE PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
             ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE UNITED STATES, AS
             APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

                  23. Severability of Provisions. If any provision of this Plan is determined
             to be invalid, illegal or unenforceable, such invalidity, illegality or
             unenforceability shall not affect the remaining provisions of the Plan, but such
             invalid, illegal or unenforceable provision shall be fully severable, and the
             Plan shall be construed and enforced as if such provision had never been
             inserted herein.

             Last Amended and Restated February 28, 2005


                                                     9




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                   EXHIBIT 10.2


             (DEAN FOODS(TM) LOGO)

                                                  DEAN FOODS COMPANY
                                              THIRD AMENDED AND RESTATED
                                                1989 STOCK AWARDS PLAN

                  1. Purpose of the Plan. This Plan shall be known as the Dean Foods Company
             Third Amended and Restated 1989 Stock Awards Plan. The purpose of the Plan is to
             attract and retain the best available persons for positions of substantial
             responsibility and to provide incentives to such persons to promote the success
             of the business of Dean Foods Company and its subsidiaries.

                  Certain options granted under this Plan are intended to qualify as
             "incentive stock options" pursuant to Section 422 of the Internal Revenue Code
             of 1986, as amended from time to time.

                   2. Definitions. The following definitions are applicable to the Plan:

                  "Authorized Officers" shall have the meaning set forth in Section 18
             hereof.

                   "Award" shall have the meaning set forth in Section 6 hereof.

                   "Board" means the Board of Directors of the Company.

                  "Change in Control" means (1) any "person" (as such term is used in Section
             13(d) of the Exchange Act but specifically excluding the Company, any
             wholly-owned subsidiary of the Company and/or any employee benefit plan
             maintained by the Company or any wholly-owned subsidiary of the Company) becomes
             the "beneficial owner" (as determined pursuant to Rule 13d-3 under the Exchange
             Act), directly or indirectly, of securities of the Company representing thirty
             percent (30%) or more of the combined voting power of the Company's then
             outstanding securities; or (2) during any period of two (2) consecutive years
             (not including any period prior to the effective date of this amendment and
             restatement), individuals who at the beginning of such period constitute the
             members of the Board and any new director, whose election to the Board or
             nomination for election to the Board by the Company's stockholders was approved
             by a vote of at least two-thirds (2/3) of the directors then still in office who
             either were directors at the beginning of the period or whose election or
             nomination for election was previously so approved, cease for any reason to
             constitute a majority of the Board; or (3) the Company or any Subsidiary shall
             merge with or consolidate into any other company, other than a merger or
             consolidation which would result in the holders of the voting securities of the
             Company outstanding immediately prior thereto holding immediately



             thereafter securities representing more than sixty percent (60%) of the combined
             voting power of the voting securities of the Company or such surviving entity
             (or its ultimate parent, if applicable) outstanding immediately after such
             merger or consolidation; or (4) the stockholders of the Company approve a plan
             of complete liquidation of the Company or an agreement for the sale or
             disposition by the Company of all or substantially all of the Company's assets
             or such a plan is commenced.

                  "Code" means the Internal Revenue Code of 1986, as amended from time to
             time, and any successor statute.

                  "Committee" means the committee described in Section 18 that administers
             the Plan or, if no such committee has been appointed, the full Board.

                  "Common Stock" means the common stock, $0.01 par value per share, of the
             Company. Except as otherwise provided herein, all Common Stock issued pursuant
             to this Plan shall have the same rights as all other issued and outstanding
             shares of Common Stock, including but not limited to voting rights, the right to
             dividends, if declared and paid, and the right to pro rata distributions of the
             Company's assets in the event of liquidation.

                  "Company" means Dean Foods Company, a Delaware corporation formerly known
             as Suiza Foods Corporation.

                  "Consultant" means any consultant or advisor who renders bona fide services
             to the Company or one of its Subsidiaries, which services are not in connection
             with the offer or sale of securities in a capital-raising transaction.

                   "Date of Grant" shall have the meaning set forth in Section 7 hereof.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                  "Employee" means any officer or other key employee of the Company or one of
             its Subsidiaries (including any director who is also an officer or key employee
             of the Company or one of its Subsidiaries).

                   "Exchange Act" means the Securities Exchange Act of 1934, as amended.

                   "Exercise Price" shall have the meaning set forth in Section 8 hereof.

                  "Fair Market Value" means the closing sale price (or average of the quoted
             closing bid and asked prices if there is no closing sale price reported) of the
             Common Stock on the date specified as reported by the principal national
             exchange or trading system on which the Common Stock is then listed or traded.
             If there is no reported price information for the Common Stock, the Fair Market
             Value will be determined by the Board or the Committee, in its sole discretion.
             In making such determination, the Board or the Committee may, but shall not be
             obligated to, commission and rely upon an independent appraisal of the Common
             Stock.


                                                      2



                  "Immediate Family Members" shall have the meaning set forth in Section
             14(d) hereof.

                  "Non-Employee Director" means an individual who is a "non-employee
             director" as defined in Rule 16b-3 under the Exchange Act and an "outside
             director" within the meaning of Treasury Regulation Section 1.162-27(e)(3).

                   "Nonqualified Option" means any Option that is not a Qualified Option.

                   "Option" means a stock option granted pursuant to Section 6 of this Plan.

                  "Optionee" means any Employee, Consultant or Non-Employee Director who
             receives an Option.

                   "Original Sponsor" shall have the meaning set forth in Section 3 hereof.

                  "Participant" means any Employee, Consultant or Non-Employee Director who
             receives an Award pursuant to this Plan.

                  "Qualified Option" means any Option that is intended to qualify as an
             "incentive stock option" within the meaning of Section 422 of the Code.

                  "Qualifying Retirement" means retirement by a Participant from employment
             or other service to the Company or any Subsidiary after such Participant reaches
             the age of 65.

                  "Restricted Stock" means Common Stock awarded to an Employee, Consultant or
             Non-Employee Director pursuant to Section 6(c) of this Plan.

                  "Rule 16b-3" means Rule 16b-3 of the rules and regulations under the
             Exchange Act, as Rule 16b-3 may be amended from time to time, and any successor
             provisions to Rule 16b-3 under the Exchange Act.

                  "Subsidiary" means any now existing or hereinafter organized or acquired
             company of which more than fifty percent (50%) of the issued and outstanding
             voting interests are owned or controlled directly or indirectly by the Company
             or through one or more Subsidiaries of the Company.

                  "10-Percent Stockholder" shall have the meaning set forth in Section 8
             hereof.

                  3. Term of Plan. This Plan was adopted by the Company in December 2001 in
             connection with the Company's acquisition of the former Dean Foods Company
             (which company was merged into a Subsidiary of the Company now known as Dean
             Holding Company) (such predecessor being herein referred to as the "Original
             Sponsor"). Such adoption was approved by the shareholders of the Company at a
             special meeting of shareholders held September 21, 2001. This Plan was first
             adopted by the Board of


                                                      3



             Directors of the Original Sponsor on August 2, 1989. The Plan shall continue in
             effect until terminated pursuant to Section 18 hereof.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                  4. Shares Subject to the Plan. Upon completion of the acquisition of the
             Original Sponsor by the Company on December 21, 2001, all outstanding Awards
             under this Plan were automatically converted pursuant to the terms of the
             Agreement and Plan of Merger dated April 4, 2001 by and among the Company (then
             known as Suiza Foods Corporation), a Delaware corporation, Blackhawk Acquisition
             Corp., a Delaware corporation and Dean Foods Company, a Delaware corporation
             (now known as Dean Holding Company). From and after the effective date of such
             acquisition, the number of shares of Common Stock which may be issued pursuant
             to Awards granted under the Plan shall not exceed, in the aggregate, 3,789,728
             shares (subject to adjustment as provided in Section 17 hereof) PLUS the number
             of shares that would have been issuable under any Awards that, after December
             21, 2001, expire unexercised or are cancelled, terminated, surrendered or
             forfeited in any manner without the issuance of shares of Common Stock
             thereunder, which shares shall again be available for the grant of additional
             Awards under the Plan; provided that any individual grant may not exceed, in the
             case of Options, 1,000,000 Options, and in the case of stock Awards, 500,000
             shares. Shares of Common Stock issuable hereunder may be either authorized but
             unissued shares, treasury shares, or a combination thereof, as the Committee
             shall determine.

                  5. Eligibility. Qualified Options may be granted under Section 6 of this
             Plan to such Employees of the Company or its Subsidiaries as may be determined
             by the Board or the Committee; other Awards may be granted under Section 6 of
             the Plan to such Employees, Consultants and Non-Employee Directors of the
             Company or its Subsidiaries as may be determined by the Board or the Committee

                  6. Grant of Options, SARs, Restricted Stock, Performance Shares and Other
             Awards. The Board or Committee may from time to time grant to eligible
             Employees, in accordance with this paragraph 6 and the other provisions of this
             Plan, Options, stock appreciation rights ("SARs"), Restricted Stock, performance
             share awards and other awards (any award granted under this Plan being herein
             referred to as an "Award"). Subject to the limitations and qualifications set
             forth below or elsewhere in this Plan, the Board or the Committee (or the
             Authorized Officers, to the extent permitted by Section 18 of this Plan) shall
             determine the number of Options, shares of Restricted Stock or other Awards to
             be granted, the number of shares subject to each Award, the Exercise Price of
             each Option, the vesting and exercise period of each Award and such other terms
             and conditions of each Award, if any, as are consistent with the provisions of
             this Plan. All Awards must be evidenced by a written Award agreement, signed by
             an authorized officer of the Company.

                       (a) Options. Options granted under this Plan may be Qualified Options
             within the meaning of Section 422A of the Code or any successor provision, or
             Non-Qualified Options; except that Qualified Options may only be granted to
             eligible Employees, and no Qualified Option may be granted under this Plan after
             July 24, 2007. In connection with the granting of Qualified Options, the
             aggregate Fair Market Value


                                                     4



             (determined at the Date of Grant of a Qualified Option) of the shares with
             respect to which Qualified Options are exercisable for the first time by an
             Optionee during any calendar year (under all such plans of the Optionee's
             employer company and its parent and subsidiary corporations as defined in
             Section 424(e) and (f) of the Code, or a corporation or a parent or subsidiary
             corporation of such corporation issuing or assuming an Option in a transaction
             to which Section 424(a) of the Code applies (collectively, such companies
             described in this sentence are hereinafter referred to as "Related Companies"))
             shall not exceed $100,000 or such other amount as from time to time provided in
             Section 422(d) of the Code or any successor provision.

                         (b) SARs.

                            (i) Subject to the limitations set forth herein, an SAR shall
             entitle its holder to receive from the Company, at the time of exercise of such
             right, an amount equal to the excess of the fair market value (at the date of
             exercise) of a share of Common Stock over a specified price fixed by the Board
             or the Committee multiplied by the number of shares as to which the holder is
             exercising the SAR. SARs may be in tandem with any previously or
             contemporaneously granted Option or independent of any Option. The specified
             price of a tandem SAR shall be the Option price of the related Option. The
             amount payable may be paid by the Company in Common Stock (valued at its Fair
             Market Value on the date of exercise), cash or a combination thereof, as the
             Board or the Committee may determine, which determination may take into
             consideration any preference expressed by the holder.


Source: DEAN FOODS CO, 10-K, March 16, 2005
                            (ii) To the extent a tandem SAR is exercised, the related Option
             will be cancelled and, to the extent the related Option is exercised, the tandem
             SAR will be cancelled.

                         (c) Restricted Stock.

                            (i) The Board or the Committee may award to any eligible
             Employee, Non-Employee Director or Consultant shares of Common Stock, subject to
             this paragraph 6(c) and such other terms and conditions as the Board or the
             Committee may prescribe (such shares being called "Restricted Stock").

                            (ii) There shall be established for each Restricted Stock Award a
             restriction period (the "restriction period"), of such length as shall be
             determined by the Board or the Committee. Shares of Restricted Stock may not be
             sold, assigned, transferred, pledged or otherwise encumbered, except as
             hereinafter provided, during the restriction period. Except for such
             restrictions on transfer and such other restrictions as the Committee may
             impose, the Participant shall have all the rights of a holder of Common Stock as
             to such Restricted Stock. The Board or the Committee, in its sole discretion,
             may permit or require the payment of any cash dividends to be deferred and, if
             the Board or the Committee so determines, reinvested in additional Restricted
             Stock or otherwise invested or accruing a yield.


                                                     5



                       (d) Performance Share Awards. A performance share Award shall entitle
             its holder to receive from the Company, following the expiration of a period of
             at least one fiscal year specified by the Committee or the Board (the
             "performance measurement period"), cash or Common Stock or a combination thereof
             as determined by the Committee or the Board (either at the time of grant or
             thereafter) in an aggregate amount based on the level of achievement during the
             performance measurement period of one or more Company financial performance
             criteria (such criteria to be determined by the Board or the Committee in its
             sole discretion). The aggregate amount received by a Participant shall be
             determined by a formula for such Participant established by the Committee or the
             Board not later than the ninetieth day of the performance measurement period.
             The formula shall establish a range between a minimum level of achievement
             before any amount will be received and a level of achievement at or above which
             the maximum potential amount will be received.

                         (e) Other Awards.

                            (i) Other Awards may be granted under this Plan, including,
             without limitation, convertible debentures, other convertible securities and
             other forms of Award measured in whole or in part by the value of shares of
             Common Stock, the performance of the Participant, or the performance of the
             Company, any Subsidiary or any operating unit thereof. Such Awards may be
             payable in Common Stock, cash or a combination thereof, and shall be subject to
             such restrictions and conditions as the Board or the Committee shall determine.
             At the time of such an Award, the Board or Committee shall, if applicable,
             determine a performance period and performance goals to be achieved during the
             performance period, subject to such later revisions as the Board or Committee
             shall deem appropriate to reflect significant unforeseen events such as changes
             in laws, regulations or accounting practices, unusual or nonrecurring items or
             occurrences. Following the conclusion of each performance period, the Board or
             Committee shall determine the extent to which performance goals have been
             attained or a degree of achievement between maximum and minimum levels during
             the performance period in order to evaluate the level of payment to be made, if
             any.

                            (ii) The purchase price per share of Common Stock under other
             Awards involving the right to purchase Common Stock (including for this purpose
             the right to purchase Common Stock upon the conversion of convertible
             securities) shall be fixed by the Board or Committee at not less than 85% of the
             Fair Market Value of a share of Common Stock on the date of Award and not less
             than the par value of a share of Common Stock.

                            (iii) A Participant may elect to defer all or a portion of any
             such Award in accordance with procedures established by the Board or Committee.
             Deferred amounts will be subject to such terms and conditions and shall accrue
             such yield thereon (which may be measured by the Fair Market Value of the Common
             Stock and dividends thereon) as the Board or Committee may determine. Payment of
             deferred amounts may be in cash, Common Stock or a combination thereof, as the
             Board or Committee may determine. Deferred amounts shall be considered an Award
             under the Plan. The Board




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                     6



             or Committee may establish a trust or trusts to hold deferred amounts or any
             portion thereof for the benefit of Participants.

                       (f) Cash Payments. SARs and Nonqualified Options may, in the Board's
             or Committee's discretion, provide that in connection with exercises thereof the
             holders will receive cash payments based on formulas designed to reimburse
             holders for their income tax liability resulting from such exercise and the
             payment made pursuant to this paragraph 6(f).

                       (g) Surrender. If so provided by the Board or Committee at or
             subsequent to the time of grant, an Award may be surrendered to the Company on
             such terms and conditions, and for such consideration, as the Board or Committee
             shall determine.

                       (h) Foreign Alternatives. Without amending and notwithstanding the
             other provisions of this Plan, in the case of any Award to be held by any
             Participant who is employed outside the United States or who is a foreign
             national, the Committee or the Board may specify that such Award shall be made
             on such terms and conditions different from those specified in the Plan as may,
             in the judgment of the Committee or the Board, be necessary or desirable to
             further the purposes of the Plan.

                  7. Date of Grant. The date of grant of an Award granted under this Plan
             (the "Date of Grant") shall be the date on which the Board or the Committee
             grants the Award or, if the Board or the Committee so determines, the date
             specified by the Board or the Committee as the date the Award is to be
             effective. Notice of the grant shall be given to each Participant to whom an
             Award is granted promptly after the date of such grant.

                  8. Price. The exercise price for each Option (the "Exercise Price") granted
             pursuant to Section 6 of this Plan shall be determined by the Board or the
             Committee at the Date of Grant; provided, however, that the Exercise Price (a)
             for any Qualified Option shall not be less than 100% of the Fair Market Value of
             the Common Stock on the day before the Date of Grant, and (b) for any
             Nonqualified Option, not less than 85% of the Fair Market Value of the Common
             Stock on the Date of Grant. If the Optionee owns on the Date of Grant more than
             10 percent of the total combined voting power of all classes of stock of the
             Company or its parent or any of its Subsidiaries, as more fully described in
             Section 422(b)(6) of the Code or any successor provision (such stockholder is
             referred to herein as a "10-Percent Stockholder"), the Exercise Price for any
             Qualified Option granted to such Optionee shall not be less than 110% of the
             Fair Market Value of the Common Stock on the day before the Date of Grant. The
             Board or the Committee in its discretion may award shares of Restricted Stock,
             Performance Share Awards and other Awards not involving the right to purchase
             Common Stock under Section 6 of this Plan to Participants without requiring the
             payment of cash consideration for such shares.

                  9. Vesting. (a) Subject to the provisions of this Plan, each Award granted
             under this Plan shall vest or be subject to forfeiture in accordance with the
             provisions set


                                                     7



             forth in the applicable Award agreement. If no vesting provisions are set forth
             in an Award agreement, the Award shall vest ratably over a three-year period.

                       (b) In addition to the vesting provisions contained in each Option
             agreement, each Option granted under the Plan shall also be subject to the
             following additional vesting provisions:

                            (i) Each unvested Option shall immediately vest in full upon the
             death of the holder of such Option;

                            (ii) Each unvested Option shall immediately vest in full upon any
             Change in Control;

                            (iii) Each unvested Option shall immediately vest in full upon
             the permanent and total disability (as defined within the meaning of Section
             22(e)(3) of the Code) of the holder of such Option; and

                            (iv) In the event of the Qualifying Retirement of an Optionee,
             all unvested Options held by such Optionee shall automatically vest in full as
             of the effective date of such Optionee's Qualifying Retirement.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                  10. Exercise. (a) An Award will not be deemed to be validly exercised, and
             shares will not be issued, until payment of any applicable Exercise Price is
             received by the Company. A Participant may pay the Exercise Price of an Award by
             the delivery of cash, check or wire transfer, or in shares of Common Stock
             already owned by the Participant, or a combination of the foregoing having a
             total Fair Market Value on the date of payment equal to the total Exercise
             Price. The Committee shall determine acceptable methods for tendering Common
             Stock as payment upon exercise of an Option and may impose such limitations and
             prohibitions on the use of the Common Stock for such purpose as it deems
             appropriate.

                       (b) If the shares to be issued upon the exercise of an Award are
             covered by an effective registration statement under the Securities Act of 1933,
             as amended, any Award may be exercised by a broker-dealer acting on behalf of a
             Participant if (i) the broker-dealer has received from the Participant or the
             Company a fully- and duly-endorsed agreement evidencing such Award, together
             with instructions signed by the Participant requesting the Company to deliver
             the shares of Common Stock subject to such Award to the broker-dealer on behalf
             of the Participant and specifying the account into which such shares should be
             deposited, (ii) adequate provision has been made with respect to the payment of
             any withholding taxes due upon such exercise, and (iii) the broker-dealer and
             the Participant have otherwise complied with Section 220.3(e)(4) of Regulation
             T, 12 CFR Part 220, or any successor provision, and any other applicable
             regulations.

                  11. Expiration of Awards. If a Participant ceases to be an Employee or
             Non-Employee Director of the Company or any Subsidiary for any reason, unless
             the Award


                                                     8



             agreement provides otherwise, such Participant's unexercised Awards (whether
             vested or not) shall expire on the earlier of (1) the expiration date contained
             in the corresponding Award agreement, or (2) (a) 60 days following the date such
             Participant ceases to be an Employee or Non-Employee Director of the Company or
             any Subsidiary, if such cessation of service is not due to the death, Qualifying
             Retirement or permanent and total disability (within the meaning of Section
             22(e)(3) of the Code) of the Participant, (b) 12 months following the date such
             Participant ceases to be an Employee or Non-Employee Director of the Company or
             any Subsidiary, if such cessation of service is due to the death or permanent
             and total disability (as defined above) of the Participant, or (c) such later
             date as may be set forth in the corresponding option agreement. Awards held by a
             Participant who has retired pursuant to a Qualifying Retirement will remain
             exercisable until the earlier of (i) the date indicated in the applicable Award
             agreement, and (ii) the first anniversary of the Participant's death. Upon the
             death of a Participant, any vested and unexercised Award may be exercised by the
             Participant's estate or by a person who acquires the right to exercise such
             Award by bequest or inheritance or by reason of the death of the Participant,
             provided that such exercise occurs within both the remaining term of the Award
             and 12 months after the date of the Participant's death. Notwithstanding the
             foregoing, Qualified Options may only be exercised during the Participant's
             lifetime by the Participant.

                  Notwithstanding any provision of this Plan or any Award agreement to the
             contrary, no Participant may, under any circumstances, exercise a vested Award
             following termination of employment if the Participant is discharged due to the
             Participant's willful or intentional fraud, embezzlement or other conduct
             seriously detrimental to the Company or any Subsidiary. The determination of
             whether or not a Participant has been discharged for any of the reasons
             specified in the preceding sentence will be made by the Committee or the Board.

                  12. Option Financing. Upon the exercise of any Option granted under this
             Plan, the Company may, but shall not be required to, make financing available to
             the Participant for the purchase of shares of Common Stock pursuant to such
             Option on such terms as the Board or the Committee may specify.

                  13. Withholding of Taxes. The Board or the Committee shall make such
             provisions and take such steps as it may deem necessary or appropriate for the
             withholding of any taxes that the Company is required by any law or regulation
             of any governmental authority to withhold in connection with any Award
             including, but not limited to, withholding the issuance of all or any portion of
             the shares of Common Stock subject to such Award until the Participant
             reimburses the Company for the amount it is required to withhold with respect to
             such taxes, canceling any portion of such issuance in an amount sufficient to
             reimburse the Company for the amount it is required to withhold or taking any
             other action reasonably required to satisfy the Company's withholding

Source: DEAN FOODS CO, 10-K, March 16, 2005
             obligation.

                  14. Conditions Upon Issuance of Shares. (a) The Company shall not be
             obligated to sell or issue any shares upon the exercise or vesting of any Award
             granted


                                                     9



             under the Plan unless the issuance and delivery of shares complies with all
             provisions of applicable federal and state securities laws and the requirements
             of any national exchange or trading system on which the Common Stock is then
             listed or traded.

                       (b) As a condition to the issuance of Common Stock pursuant to any
             Award, the Company may require the recipient of such Award to make such
             representations and warranties as may be necessary to assure the availability of
             an exemption from the registration requirements of applicable federal and state
             securities laws.

                       (c) The Company shall not be liable for refusing to sell or issue any
             shares pursuant to any Award if the Company cannot obtain authority from the
             appropriate regulatory bodies deemed by the Company to be necessary to sell or
             issue such shares in compliance with all applicable federal and state securities
             laws and the requirements of any national exchange or trading system on which
             the Common Stock is then listed or traded. In addition, the Company shall have
             no obligation to any Participant, express or implied, to list, register or
             otherwise qualify the shares of Common Stock covered by any Award.

                       (d) No Participant will be, or will be deemed to be, a holder of any
             Common Stock subject to an Award unless and until the Award is vested, the
             Participant has exercised the Award, if applicable, paid any applicable Exercise
             Price for the subject shares of Common Stock and received the shares. Unless an
             award agreement provides otherwise, each unexercised Award (whether vested or
             not) shall be transferable only by will or the laws of descent and distribution;
             provided, however, that the Participant may transfer his or her unexercised
             Award (other than Qualified Options) without consideration to (i) the spouse,
             children or grandchildren of the Participant ("Immediate Family Members"), (ii)
             a trust or trusts, or to a guardian under the Uniform Gift to Minors Act, for
             the exclusive benefit of such Immediate Family Members, or (iii) a partnership
             or other entity in which such Immediate Family Members are the only partners,
             provided that subsequent transfers of transferred Awards shall be prohibited
             except by will or the laws of descent and distribution. Following transfer, any
             such Awards shall continue to be subject to the same terms and conditions as
             were applicable immediately prior to transfer, provided that, for purposes of
             each Award agreement and Section 10 hereof, the terms "Optionee" or
             "Participant" shall be deemed to refer to the transferee (however, the events of
             termination of employment, if any, set forth in the agreement and the obligation
             to pay withholding taxes shall continue to apply to the transferor).
             Notwithstanding the foregoing, Qualified Options shall be nontransferable except
             by will or the laws of descent and distribution, and may only be exercisable
             during the Participant's lifetime, by the Participant.

                  15. Restrictions on Shares. Shares of Common Stock issued pursuant to this
             Plan may be subject to restrictions on transfer under applicable federal and
             state securities laws. The Board may impose such additional restrictions on the
             ownership and transfer of shares of Common Stock issued pursuant to the Plan as
             it deems desirable; any such restrictions shall be set forth in any Award
             agreement entered into hereunder.


                                                    10



                  16. Modification of Awards. At any time and from time to time, the Board or
             the Committee may execute an instrument providing for modification, extension or
             renewal of any outstanding Award, provided that no such modification, extension
             or renewal shall impair any Award without the consent of the holder of the
             Award. Notwithstanding the foregoing, in the event of a modification, extension
             or renewal of a Qualified Option, the Board or the Committee may increase the
             exercise price of such Option if necessary to retain the qualified status of
             such Option. Any amendment to the Plan shall apply to all Awards outstanding at
             the time of such amendment in addition to all Awards granted thereafter, subject
             to the limitations of the first sentence in this Section 16, but in no event
             shall it apply to any Qualified Option if such action would cause the Qualified
             Option to lose its tax-advantaged status.


Source: DEAN FOODS CO, 10-K, March 16, 2005
                  17. Effect of Change in Stock Subject to the Plan. In the event that each
             of the outstanding shares of Common Stock (other than shares held by dissenting
             stockholders) shall be changed into or exchanged for a different number or kind
             of shares of stock of the Company or of another company (whether by reason of
             merger, consolidation, recapitalization, reclassification, split-up, combination
             of shares or otherwise), or in the event a stock split or stock dividend or
             similar transaction occurs, then there shall be substituted for each share of
             Common Stock then subject to Awards or available for Awards the number and kind
             of shares of stock into which each outstanding share of Common Stock (other than
             shares held by dissenting stockholders) shall be so changed or exchanged, or the
             number of shares of Common Stock as is equitably required in the event of a
             stock split or stock dividend or similar transaction, together with an
             appropriate adjustment of the Exercise Price. The Board may, but shall not be
             required to, provide additional anti-dilution protection to a Participant under
             the terms of the Participant's Award agreement.

                  18. Administration. (a) The Plan shall be administered by the Board or by a
             committee of the Board comprised solely of two or more Non-Employee Directors
             appointed by the Board who meet the independence standard established from time
             to time by the New York Stock Exchange (the "Committee"). Awards may be granted
             under Section 6 (i) by the Board as a whole, or (ii) by majority agreement of
             the members of the Committee. In addition, to the extent permitted by applicable
             law (including the Exchange Act and the Code), the Board or the Committee may at
             any given time authorize an aggregate number of Awards to be granted to eligible
             Employees, and then authorize one or more officers of the Company (the
             "Authorized Officers") to allocate such Awards among eligible Employees;
             provided that the Authorized Officers may not allocate Awards to themselves or
             other executive officers, and the terms of the Awards, including the Exercise
             Price (if any) must be established by the Board or the Committee. Award
             agreements, in the forms as approved by the Board or the Committee, and
             containing such terms and conditions consistent with the provisions of this Plan
             as are determined by the Board or the Committee, may be executed on behalf of
             the Company by the Chairman of the Board, the President or any Vice President of
             the Company. The Board or the Committee shall have complete authority to
             construe, interpret and administer the provisions of this Plan and the
             provisions of the Award agreements


                                                    11



             granted hereunder; to prescribe, amend and rescind rules and regulations
             pertaining to this Plan; to suspend or discontinue this Plan; and to make all
             other determinations necessary or deemed advisable in the administration of this
             Plan. The determinations, interpretations and constructions made by the Board or
             the Committee shall be final and conclusive. No member of the Board or the
             Committee shall be liable for any action taken, or failed to be taken, made in
             good faith relating to this Plan or any Award thereunder, and the members of the
             Board or the Committee shall be entitled to indemnification and reimbursement by
             the Company in respect of any claim, loss, damage or expense (including
             attorneys' fees) arising therefrom to the fullest extent permitted by law.

                       (b) Subject to any applicable requirements of Rule 16b-3 or of any
             national exchange or trading system on which the Common Stock is then listed or
             traded, and subject to the stockholder approval requirements of Sections 422 and
             162(m)(4)(C) of the Code, the Board may amend any provision of this Plan in any
             respect in its discretion.

                  19. Continued Employment Not Presumed. Nothing   in this Plan or any document
             describing it nor the grant of any Award shall give   any Participant the right to
             continue in the employment of the Company or affect   the right of the Company to
             terminate the employment of any such person with or   without cause. No Employee
             shall have a right to be selected as a Participant,   or, having been so selected,
             to be selected again as a Participant.

                   20. Liability of the Company. Neither the Company, its directors, officers
             or Employees or the Committee, nor any Subsidiary which is in existence or
             hereafter comes into existence, shall be liable to any Participant or other
             person if it is determined for any reason by the Internal Revenue Service or any
             court having jurisdiction that any Qualified Option granted hereunder does not
             qualify for tax treatment as an incentive stock option under Section 422 of the
             Code.

                  21. GOVERNING LAW. THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
             ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE UNITED STATES, AS
             APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

                  22. Severability of Provisions. If any provision of this Plan is determined
             to be invalid, illegal or unenforceable, such invalidity, illegality or

Source: DEAN FOODS CO, 10-K, March 16, 2005
             unenforceability shall not affect the remaining provisions of the Plan, but such
             invalid, illegal or unenforceable provision shall be fully severable, and the
             Plan shall be construed and enforced as if such provision had never been
             inserted herein.

                                 Last Amended and Restated February 28, 2005


                                                       12




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                    EXHIBIT 10.4


                                               DEAN FOODS COMPANY

                                 POST-2004 EXECUTIVE DEFERRED COMPENSATION PLAN


                                                                                               .
                                                                                               .
                                                                                               .

                                               DEAN FOODS COMPANY

                                 POST-2004 EXECUTIVE DEFERRED COMPENSATION PLAN

                                                Table of Contents



                                                                                            Page
                                                                                            ----

             ARTICLE I         DEFINITIONS...............................................     1

             ARTICLE II        ELIGIBILITY...............................................     3

             ARTICLE III       CREDITS TO ACCOUNT........................................     3

             ARTICLE IV        BENEFITS..................................................     5

             ARTICLE V         PAYMENT OF BENEFITS AT TERMINATION........................     6

             ARTICLE VI        IN-SERVICE WITHDRAWALS....................................     7

             ARTICLE VII       ADMINISTRATION OF THE PLAN................................     8

             ARTICLE VIII      CLAIMS REVIEW PROCEDURE...................................     9

             ARTICLE IX        LIMITATION OF RIGHTS......................................    10

             ARTICLE X         LIMITATION OF ASSIGNMENT AND PAYMENTS TO LEGALLY
                                  INCOMPETENT DISTRIBUTEE................................    11

             ARTICLE XI        AMENDMENT TO OR TERMINATION OF THE PLAN...................    11

             ARTICLE XII       GENERAL AND MISCELLANEOUS.................................    11




                                               DEAN FOODS COMPANY
                                 POST-2004 EXECUTIVE DEFERRED COMPENSATION PLAN

                                                    PREAMBLE

                  WHEREAS, Dean Foods Company (the "Company"), a corporation formed under the
             laws of the State of Delaware, sponsors the Dean Foods Company Executive
             Deferred Compensation Plan (the "Pre-2005 Plan") for the exclusive benefit of a
             select group of management and highly compensated employees of the Company and
             its affiliates to provide an additional means by which such employees may defer
             funds for their retirement;

                  WHEREAS, the American Jobs Creation Act of 2004 imposes new restrictions on
             deferred compensation arrangements for compensation earned after 2004;

                  WHEREAS, the Company desires to establish a new plan to be known as the
             Dean Foods Company Post-2004 Executive Deferred Compensation Plan (the "Plan")
             to provide for the deferral of compensation after 2004;

                   NOW, THEREFORE, the Company hereby adopts the Plan to read as follows:

                                                   ARTICLE I

                                                  DEFINITIONS

                  1.1 "Account" shall mean the individual bookkeeping record established by
             the Committee showing the monetary value of the interest in the Plan of each
             Participant or Beneficiary.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                  1.2 "Affiliate" shall mean a member of a controlled group of corporations
             (as defined in Section 414(b) of the Code), a group of trades or businesses
             (whether or not incorporated) which are under common control (as defined in
             Section 414(c) of the Code), or an affiliated service group (as defined in
             Section 414(m) of the Code) of which the Company is a member; and any entity
             otherwise required to be aggregated with the Company pursuant to Section 414(o)
             of the Code or the regulations issued thereunder; and any other entity in which
             the Company has an ownership interest and to which the Company elects to make
             participation in the Plan available.

                  1.3 "Annual Compensation" shall mean the salary, bonuses and commissions
             paid or accrued by the Company or an Affiliate to an employee as remuneration
             for personal services rendered during each Plan Year, as reported on the
             employee's federal income tax withholding statement or statements (IRS Form W-2
             or its subsequent equivalent), together with any amounts not includable in such
             employee's gross income pursuant to Sections 125 or 402(g) of the Code, and any
             amounts deferred by such employee pursuant to Section 3.1 hereof. The term
             "Annual Compensation" shall also include any amounts paid as director's fees to
             members of the Board or members of the board of directors of an Affiliate.



                  1.4 "Beneficiary" shall mean the Beneficiary designated by each Participant
             under the 401(k) Plan; provided, however, that a Participant may designate a
             different Beneficiary hereunder by delivering to the Committee a written
             beneficiary designation, in the form provided by the Committee, and executed
             specifically with respect to this Plan.

                   1.5 "Board" shall mean the Board of Directors of the Company.

                  1.6 "Code" shall mean the Internal Revenue Code of 1986, as it may be
             amended from time to time, and the rules and regulations promulgated thereunder.

                   1.7 "Committee" shall mean the Compensation Committee of the Board.

                   1.8 "Company" shall mean Dean Foods Company or its successor or successors.

                  1.9 "Company Contribution Account" shall mean the subaccount of each
             Participant's Account showing the monetary value of the Participant's interest
             in the Plan which is attributable to matching or profit sharing contributions
             credited pursuant to Sections 3.2 and 3.3.

                  1.10 "Disability" shall mean the Participant either (a) is unable to engage
             in any substantial gainful activity by reason of any medically determinable
             physical or mental impairment which can be expected to result in death or can be
             expected to last for a continuous period of not less than 12 months, or (b) is,
             by reason of any medically determinable physical or mental impairment which can
             be expected to result in death or can be expected to last for a continuous
             period of not less than 12 months, receiving income replacement benefits for a
             period of not less than 3 months under an accident and health plan covering
             employees of the Company.

                   1.11 "Effective Date" shall mean January 1, 2005.

                   1.12 "401(k) Plan" shall mean the Dean Foods 401(k) Plan.

                  1.13 "Participant" shall mean an individual who has been designated by the
             Committee as being eligible to participate in the Plan.

                  1.14 "Performance-Based Compensation" shall mean compensation earned by a
             Participant based on satisfaction of variable and contingent individual or
             organizational performance criteria not readily ascertainable at the time the
             election is made and is based on services to be performed over a period of at
             least 12 months.

                  1.15 "Performance Period" shall mean the period over which
             Performance-Based Compensation is earned.

                   1.16 "Plan" shall mean the Dean Foods Company Post-2004 Executive Deferred
             Compensation Plan set forth in this document, as it may be amended from time to
             time.

                  1.17 "Plan Year" shall mean the twelve-month period beginning each January
             1 and ending each December 31.


                                                     -2-




Source: DEAN FOODS CO, 10-K, March 16, 2005
                  1.18 "Profit Sharing Credit" shall mean the amount contributed to the
             Participant's Account as a profit sharing credit pursuant to Section 3.3 hereof.

                  1.19 "Trust" shall mean the Dean Foods Company Executive Deferred
             Compensation Plan Trust.

                  1.20 "Valuation Date" shall mean each business day on which the financial
             markets are open for trading activity or such other dates as may be established
             by the Committee.

                                                  ARTICLE II

                                                 ELIGIBILITY

                  Participation in the Plan shall be made available to a select group of
             individuals, as determined by the Board or the Committee, who are providing
             services to the Company or an Affiliate in key positions of management and
             responsibility. Participation in the Plan shall also be made available to
             members of the Board and any outside directors of subsidiaries of the Company.
             Such individuals may elect to participate hereunder by executing a participation
             agreement in such form and at such time as the Committee shall require, provided
             that each participation agreement shall be executed no later than the day
             immediately preceding the Plan Year for which an individual elects to make
             contributions to the Plan in accordance with the provisions of Section 3.1
             hereof for compensation other than Performance-Based Compensation, and not later
             than six months before the end of the Performance Period, for Performance-Based
             Compensation. Notwithstanding the foregoing, in the first year in which an
             individual becomes eligible to participate in the Plan, he may elect to
             participate in the Plan by executing a participation agreement, in such form as
             the Committee shall require, within thirty (30) days after the date on which he
             is notified by the Committee of his eligibility to participate in the Plan or,
             with respect to Performance-Based Compensation, such later date as is specified
             in the preceding sentence. The election to participate in the Plan for a
             Participant first enrolled during a Plan Year shall become effective as of the
             first full payroll period beginning on or after the Committee's receipt of his
             participation agreement. The determination as to the eligibility of any
             individual to participate in the Plan shall be in the sole and absolute
             discretion of the Committee, whose decision in that regard shall be conclusive
             and binding for all purposes hereunder.

                                                 ARTICLE III

                                              CREDITS TO ACCOUNT

                  3.1 For any Plan Year, a Participant may, in the manner and at the time
             prescribed by the Committee, irrevocably elect to defer a portion of the Annual
             Compensation otherwise payable to such Participant with respect to such Plan
             Year, not to exceed the maximum amount established by the Committee. Any amount
             deferred, pursuant to this Article III, from the Annual Compensation otherwise
             payable to a Participant shall be transferred to the Trust and credited to the
             Account of such Participant as soon as practicable after the date on which such
             amounts would otherwise have been paid to the Participant.


                                                      -3-



                  3.2 The Committee shall credit a matching contribution, calculated as
             provided in this Section 3.2, to the Company Contribution Account of each
             Participant who has deferred amounts under the Plan during any Plan Year
             pursuant to Section 3.1 above. The matching contribution, if any, shall be
             computed as follows: (i) the Committee shall first compute a maximum matching
             contribution for each Participant for a Plan Year, on the salary deferrals made
             by the Participant under the 401(k) plan in which the Participant participates,
             using the formula applied by such 401(k) plan with respect to percentage of
             salary deferrals matched and the maximum percentage of compensation which is
             subject to the match, but using the Participant's Annual Compensation as defined
             in this Plan up to the maximum compensation that may be considered on behalf of
             a participant under such 401(k) plan (unless otherwise approved by the Board of
             Directors of the Company); (ii) the Committee shall then determine the amount of
             matching contributions made for the Participant under such 401(k) plan; and
             (iii) the difference between (i) and (ii), if any, is the matching contribution
             to be credited to the Participant's Company Contribution Account under the Plan.
             The Committee shall credit a matching contribution, if any, to the Participant's
             Company Contribution Account as soon as administratively practicable following
             the end of the Plan Year in which the 401(k) plan year ends, and the Company
             shall transfer a similar amount to the Trust as soon as administratively
             practicable following such date. A member of the Board or an outside director of

Source: DEAN FOODS CO, 10-K, March 16, 2005
             a subsidiary who participates in the Plan is not eligible for matching
             contributions.

                  3.3 For each Plan Year, the Committee shall credit each Participant's
             Company Contribution Account with an amount that represents a Profit Sharing
             Credit. The Profit Sharing Credit shall be equal in amount to the additional
             contribution, if any, which would have been allocated as a non-matching
             contribution to the Participant's account in the 401(k) plan in which the
             Participant is eligible to participate, if the Participant had not elected to
             defer, pursuant to this Plan, Annual Compensation that otherwise would have been
             paid during the plan year of the 401(k) plan which ends in the Plan Year. The
             Committee shall credit the Profit Sharing Credit to the Company Contribution
             Account of each Participant entitled thereto as soon as administratively
             practicable following the end of the Plan Year. A member of the Board or an
             outside director of a subsidiary who participates in the Plan is not eligible
             for a Profit Sharing Credit.

                  3.4 At the time of making the deferrals elections described in Section 3.1
             and at such other times as is allowed by the Committee, the Participant shall
             designate, on a form provided by the Committee, the types of investments,
             including life insurance policies, in which the Participant's Account will be
             deemed to be invested for purposes of determining the amount of earnings to be
             credited to that Account. On a quarterly or other basis selected by the
             Committee, the Committee shall credit to each Participant's Account an amount
             equal to the interest, earnings or losses that would have resulted to the
             Account if the amounts credited to the Account were invested as elected by the
             Participant. If the Participant designates a deemed investment in a life
             insurance policy, the rate of earnings to be credited to such Participant's
             Account shall be as set forth in a split-dollar life insurance agreement or
             other agreement concerning such a policy.

                  3.5 At any time, the Company may, in its sole discretion, credit an amount
             on behalf of a particular Participant to his or her account. The crediting of
             such an amount shall be evidenced by providing the Participant a notice or
             statement specifying the amount of the credit.


                                                    -4-



             Thereafter, the amount credited to the Participant's Account shall be subject to
             all of the same terms and provisions as amounts credited to the Account under
             Sections 3.1 through 3.4 of the Plan.

                                                ARTICLE IV

                                                 BENEFITS

                  4.1 After the death of a Participant, the Beneficiary of such Participant
             shall be entitled to the entire value of all amounts credited to such
             Participant's Account, determined as of the Valuation Date coincident with or
             preceding the date of distribution, including any additional amount credited to
             such Participant's Account as a result of life insurance proceeds payable on the
             Participant's death.

                  4.2 After the Disability of a Participant, such Participant shall be
             entitled to the entire value of all amounts credited to such Participant's
             Account, determined as of the Valuation Date coincident with or preceding the
             date of Disability. Such amount shall be payable to the Participant at the time
             and in the manner determined by the Committee.

                  4.3 After a Participant's employment terminates or such Participant ceases
             to be a member of the Board or a board of directors of a subsidiary for any
             reason other than death or Disability, such Participant shall be entitled to the
             entire value of all amounts credited to the Account of such Participant,
             determined as of the Valuation Date coincident with or preceding the date of
             distribution, except that the Participant shall only be entitled to the vested
             portion, if any, of his Company Contribution Account. The vested portion of a
             Participant's Company Contribution Account shall be determined by applying the
             Participant's vesting percentage calculated pursuant to the terms of the 401(k)
             Plan. In addition to crediting service with Related Employers, as that term is
             defined in the 401(k) Plan, the Company will credit service with organizations
             and their predecessors in which the Company owns an interest but which do not
             qualify as Related Employers.

                  4.4 To the extent allowed by regulations issued by the U.S. Department of
             the Treasury, if there is a change in the ownership or effective control of the
             employer of the Participant (or the employer's parent) or in the ownership of a
             substantial portion of the assets of the employer of the Participant

Source: DEAN FOODS CO, 10-K, March 16, 2005
             (hereinafter collectively called a "Change in Control"), the Plan shall
             distribute the Accounts of all Participants employed by such employer or its
             subsidiaries impacted by such Change in Control, in a single lump sum within 30
             days after such Change in Control or at such later date as is required by such
             regulations. The determination of whether a Change in Control has occurred and
             whether a distribution may be made to the Participants shall be made based on
             the definition of a Change in Control that is found in the regulations issued by
             the U.S. Department of the Treasury under Section 409A of the Code, which
             regulations are incorporated herein by reference.


                                                        -5-



                                                    ARTICLE V

                                        PAYMENT OF BENEFITS AT TERMINATION

                  5.1 In the case of a Participant who terminates employment with the Company
             or ceases to be a member of the Board or an outside director of a subsidiary of
             the Company, the amount credited to the Participant's Account (provided it is
             more than $25,000 or such smaller amount allowed by regulations issued by the
             U.S. Department of the Treasury) shall be paid in cash, to the Participant, at
             the time the distribution of the Account is to commence, from among the
             following optional forms of benefit as elected by the Participant on the form
             provided by the Company upon his or her initial participation in the Plan:

                   (1)   a lump sum distribution;

                   (2)   substantially equal annual installments over five (5) years; or

                   (3)   substantially equal annual installments over ten (10) years.

                  Notwithstanding the Participant's distribution election, if the amount
             credited to a Participant's Account is equal to or less than $25,000 (or such
             smaller amount allowed by regulations issued by the U.S. Department of the
             Treasury), at the time distribution of the Account is to commence, payment will
             be made in a lump sum, and even if installment payments have commenced under
             this Section 5.1, at such time as the value of such remaining amounts is $25,000
             (or such smaller amount allowed by regulations issued by the U.S. Department of
             the Treasury), all remaining amounts credited to a Participant's Account shall
             be distributed in a lump sum.

                  Payment shall commence as soon as practicable following the Participant's
             termination of employment with the Company or termination as a member of the
             Board or a director of a subsidiary of the Company, or, if so elected by the
             Participant in the Participant's deferral election form provided by the
             Committee, as soon as practicable during the calendar year following the year in
             which such event occurs. If installment payments are made, the unpaid balance of
             the Participant's Account shall continue to share in the income and losses
             attributable thereto, in accordance with the provisions of the Trust, during the
             period for which installment payments are made. To the extent allowed by
             regulations issued by the U.S. Department of the Treasury, a Participant may
             modify the time or form of benefit that he or she has previously elected, as
             long as he or she provides the Committee with written notice at least one (1)
             year in advance of the effective date of the change and as long as the change
             postpones the payment(s) at least five years after their scheduled payment
             date(s).

                  5.2 Payment of a Participant's benefit on account of death shall be made to
             the Beneficiary of such Participant in a lump sum in cash as soon as practicable
             following the Committee's receipt of proper notice of such Participant's death.

                  5.3 Notwithstanding the provisions of Sections 5.1 or 5.2, and to the
             extent allowed by regulations issued by the U.S. Department of the Treasury, the
             benefits payable hereunder may be paid before they would otherwise be payable
             if, based on a change in the federal or applicable state tax or revenue laws, a
             published ruling or similar announcement issued by the Internal Revenue Service,
             a regulation issued by the U.S. Department of the Treasury, a decision


                                                        -6-



             by a court of competent jurisdiction involving a Participant or a Beneficiary,
             or a closing agreement made under Section 7121 of the Code that is approved by
             the Internal Revenue Service and involves a Participant, the Committee
             determines that a Participant has or will recognize income for federal or state

Source: DEAN FOODS CO, 10-K, March 16, 2005
             income tax purposes with respect to amounts that are or will be payable under
             the Plan before they otherwise would be paid. The amount of any payments
             pursuant to this Section 5.3 shall not exceed the lesser of: (a) the amount in
             the Participant's Account or (b) the amount of taxable income with respect to
             which the tax liability is assessed or determined.

                  5.4 The payment of benefits under the Plan shall begin at the date
             specified in accordance with the provisions of Sections 5.1 and 5.2 hereof;
             provided that, in case of administrative necessity, the starting date of payment
             of benefits may be delayed up to thirty (30) days as long as such delay does not
             result in the Participant's or Beneficiary's receiving the distribution in a
             different taxable year than if no such delay had occurred.

                                                      ARTICLE VI

                                                IN-SERVICE WITHDRAWALS

                  6.1 In the event of an unforeseeable emergency, a Participant may make a
             request to the Committee for a withdrawal from the Account of such Participant.
             For purposes of this Section, the term "unforeseeable emergency" shall mean a
             severe financial hardship to the Participant resulting from an illness or
             accident of the Participant, the Participant's spouse, or a dependent [as
             defined in Section 152(a) of the Code] of the Participant, loss of the
             Participant's property due to casualty, or other similar extraordinary and
             unforeseeable circumstances arising as a result of events beyond the control of
             the Participant. Any determination of the existence of an unforeseeable
             emergency and the amount to be withdrawn on account thereof shall be made by the
             Committee, in its sole and absolute discretion. However, notwithstanding the
             foregoing, a withdrawal will not be permitted to the extent that the financial
             hardship is or may be relieved: (i) through reimbursement or compensation by
             insurance or otherwise; (ii) by liquidation of the Participant's assets, to the
             extent that liquidation of such assets would not itself cause severe financial
             hardship; or (iii) by cessation of deferrals under this Plan. In no event shall
             the need to send a Participant's child to college or the desire to purchase a
             home be deemed to constitute an unforeseeable emergency. No member of the
             Committee shall vote or decide upon any matter relating to the determination of
             the existence of such member's own financial hardship or the amount to be
             withdrawn on account thereof. A request for a hardship withdrawal must be made
             in the manner prescribed by the Committee, and must be expressed as a specific
             dollar amount. The amount of a hardship withdrawal may not exceed the amount
             required to meet the severe financial hardship plus the amount needed to pay
             taxes reasonably anticipated as a result of the distribution. All hardship
             withdrawals shall be paid in a lump sum in cash.

                  6.2 On a form prescribed by the Committee, a Participant, prior to the
             beginning of any Plan Year, can elect to receive that Plan Year's deferrals made
             pursuant to Section 3.1, matching contributions credited pursuant to Section
             3.2, additional credits made that Plan Year pursuant to Sections 3.3, 3.4, or
             3.5 and earnings thereon, at a date specified by the Participant. Such date
             shall be no earlier than two (2) years from the last day of the Plan Year for
             which the deferrals and matching and other credits are made. A Participant may
             extend the scheduled in-


                                                          -7-



             service withdrawal date for any Plan Year, as long as the Participant provides
             advance written notice to the Committee at least one year before the scheduled
             payment date, and such extension is for a period of not less than five years
             from the previous, scheduled in-service withdrawal date. Any withdrawal under
             this Section 6.2 shall be made in a single lump sum, in cash.

                  6.3 Withdrawals shall be charged pro rata to the investment options in
             which amounts credited to a Participant's Account are deemed to be invested
             pursuant to Section 3.4 hereof.

                                                     ARTICLE VII

                                              ADMINISTRATION OF THE PLAN

                  7.1 The Plan shall be administered by the Committee. The members of the
             Committee shall not receive compensation with respect to their services for the
             Committee. The members of the Committee shall serve without bond or security for
             the performance of their duties hereunder unless applicable law makes the
             furnishing of such bond or security mandatory or unless required by the Company.

                  7.2 The Committee shall perform any act which the Plan authorizes expressed
             by a vote at a meeting or in a writing signed by a majority of its members

Source: DEAN FOODS CO, 10-K, March 16, 2005
             without a meeting. The Committee may, by a writing signed by a majority of its
             members, appoint any member of the Committee to act on behalf of the Committee.
             Any person who is a member of the Committee shall not vote or decide upon any
             matter relating solely to such member or vote in any case in which the
             individual right or claim of such member to any benefit under the Plan is
             particularly involved. If, in any matter or case in which a person is so
             disqualified to act, the remaining persons constituting the Committee cannot
             resolve such matter or case, the Board will appoint a temporary substitute to
             exercise all the powers of the disqualified person concerning the matter or case
             in which such person is disqualified.

                  7.3 The Committee may designate in writing other persons to carry out its
             responsibilities under the Plan, and may remove any person designated to carry
             out its responsibilities under the Plan by notice in writing to that person. The
             Committee may employ persons to render advice with regard to any of its
             responsibilities. All usual and reasonable expenses of the Committee shall be
             paid by the Company. The Company shall indemnify and hold harmless each member
             of the Committee from and against any and all claims and expenses (including,
             without limitation, attorneys' fees and related costs), in connection with the
             performance by such member of duties in that capacity, other than any of the
             foregoing arising in connection with the willful neglect or willful misconduct
             of the person so acting.

                  7.4 The Committee shall establish rules and procedures, not contrary to the
             provisions of the Plan, for the administration of the Plan and the transaction
             of its business. The Committee shall determine the eligibility of any individual
             to participate in the Plan, shall interpret the Plan in its sole and absolute
             discretion, and shall determine all questions arising in the administration,
             interpretation and application of the Plan. All determinations of the Committee
             shall be conclusive and binding on all employees, Participants and
             Beneficiaries.


                                                        -8-



                  7.5 Any action to be taken hereunder by the Company shall be taken by
             resolution adopted by the Board or by a committee thereof; provided, however,
             that by resolution, the Board or a committee thereof may delegate to any officer
             of the Company the authority to take any such actions hereunder.

                                                   ARTICLE VIII

                                              CLAIMS REVIEW PROCEDURE

                  8.1 In the event that a Participant or Beneficiary is denied a claim for
             benefits under this Plan (the "Claimant"), the Committee shall provide to the
             Claimant written notice of the denial within 90 days after the claim is filed
             (45 days in the case of a Disability claim) unless an extension of time for
             processing the claim is necessary because more information is needed (or, in the
             case of a Disability claim, an extension is necessary for reasons beyond the
             control of the Committee), in which case a decision will be rendered not later
             than 180 days (75 days in the case of a Disability claim which may be further
             extended to 105 days if the additional extension is necessary due to reasons
             beyond the control of the Committee) after the initial receipt of the claim. If
             such an extension of time for processing the claim is required, written notice
             of the extension and additional information that is necessary to process the
             claim will be furnished to the Claimant prior to the expiration of the initial
             90-day (or 45-day) period and will indicate the special circumstances requiring
             an extension of time for processing the claim and will indicate the date the
             Committee expects to render its decision. In no event will such extension exceed
             a period of 90 days from the end of the initial period. The notice shall set
             forth:

                   (a)   the specific reason or reasons for the denial;

                   (b)   specific references to pertinent Plan provisions on which the
                         Committee based its denial;

                   (c)   a description of any additional material or information needed for the
                         Claimant to perfect the claim and an explanation of why the material
                         or information is needed;

                   (d)   if the claim is a claim for a Disability benefit, the Participant will
                         be notified if an internal rule, guideline, protocol or other similar
                         criterion was relied on by the Committee and the Participant will be
                         provided with a copy of such rule, guideline, protocol, or other
                         criterion free of charge on the Participant's request. If the claim is
                         a claim for a Disability benefit and the denial is based on a medical

Source: DEAN FOODS CO, 10-K, March 16, 2005
                         necessity or other similar exclusion or limit, the Participant will be
                         provided, free of charge at his or her request, an explanation of how
                         that exclusion or limit and any clinical judgments apply to the
                         Participant's medical circumstances.

                   (e)   a statement that the Claimant may:

                         (i) request a review upon written application to the Committee;

                         (ii) review pertinent Plan documents; and


                                                       -9-



                         (iii) submit issues and comments in writing; and

                   (f)   that any appeal the Claimant wishes to make of the adverse
                         determination must be in writing and received by the Committee within
                         60 days (180 days in the case of a Disability claim) after receipt of
                         the Committee's notice of denial of benefits. The Committee's notice
                         must further advise the Claimant that failure to appeal the action to
                         the Committee in writing within the 60-day (or 180-day) period will
                         render the Committee's determination final, binding, and conclusive.

                  8.2 If the Claimant should appeal to the Committee, the Claimant, or the
             duly authorized representative of such Claimant, may submit, in writing,
             whatever issues and comments such Claimant, or the duly authorized
             representative of such Claimant, feels are pertinent. The Committee shall
             re-examine all facts related to the appeal and make a final determination as to
             whether the denial of benefits is justified under the circumstances. The
             Committee shall advise the Claimant in writing of its decision on the appeal,
             the specific reasons for the decision, and the specific Plan provisions on which
             the decision is based. The notice of the decision shall be given within 60 days
             (45 days in the case of a Disability claim) of the Claimant's written request
             for review, unless special circumstances (such as a hearing) would make the
             rendering of a decision within the 60-day (or 45-day) period infeasible, but in
             no event shall the Committee render a decision regarding the denial of a claim
             for benefits later than 120 days (90 days in the case of a Disability claim)
             after its receipt of a request for review. If an extension of time for review is
             required because of special circumstances, written notice of the extension shall
             be furnished to the Claimant prior to the date the extension period commences.
             The Claimant will also be entitled to receive, on request and free of charge,
             access to and copies of all documents, records, and other information relevant
             to the claim. In addition, if the claim is a claim for a Disability benefit, the
             Participant will be notified if an internal rule, guideline, protocol or other
             similar criterion was relied on by the Committee and will be provided with a
             copy of such rule, guideline, protocol, or other criterion free of charge at
             your request. If the claim is a claim for a Disability benefit and the denial is
             based on a medical necessity or other similar exclusion or limit, the
             Participant will be provided, free of charge at his or her request, an
             explanation of how that exclusion or limit and any clinical judgments apply to
             the Participant's medical circumstances. In the case of a Disability claim, the
             review on appeal must be made by a different decision-maker from the Committee
             and that decision-maker cannot give procedural deference to the original
             decision. If the Claimant is dissatisfied with the Committee's (or other
             independent fiduciary's) review decision, the Claimant has the right to file
             suit in a federal or state court.

                                                   ARTICLE IX

                                              LIMITATION OF RIGHTS

                  The establishment of this Plan shall not be construed as giving to any
             Participant, employee of the Company or any person whomsoever, any legal,
             equitable or other rights against the Company, or its officers, directors,
             agents or shareholders, or as giving to any Participant or Beneficiary any
             equity or other interest in the assets or business of the Company or shares of
             Company stock or as giving any employee the right to be retained in the
             employment of the


                                                      -10-



             Company. All employees of the Company and Participants shall be subject to
             discharge to the same extent they would have been if this Plan had never been
             adopted.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                      ARTICLE X

                                       LIMITATION OF ASSIGNMENT AND PAYMENTS
                                        TO LEGALLY INCOMPETENT DISTRIBUTEE

                  10.1 No benefits which shall be payable under the Plan to any person shall
             be subject in any manner to anticipation, alienation, sale, transfer,
             assignment, pledge, encumbrance or charge, and any attempt to anticipate,
             alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose
             of the same shall be void. No benefit shall in any manner be subject to the
             debts, contracts, liabilities, engagements or torts of any person, nor shall it
             be subject to attachment or legal process for or against any person, except to
             the extent required by law.

                  10.2 Whenever any benefit which shall be payable under the Plan is to be
             paid to or for the benefit of any person who is then a minor or determined by
             the Committee, on the basis of qualified medical advice, to be incompetent, the
             Committee need not require the appointment of a guardian or custodian, but shall
             be authorized to cause the same to be paid over to the person having custody of
             the minor or incompetent, or to cause the same to be paid to the minor or
             incompetent without the intervention of a guardian or custodian, or to cause the
             same to be paid to a legal guardian or custodian of the minor or incompetent, if
             one has been appointed, or to cause the same to be used for the benefit of the
             minor or incompetent.

                                                      ARTICLE XI

                                      AMENDMENT TO OR TERMINATION OF THE PLAN

                  The Committee and the Board reserve the right at any time to amend or
             terminate the Plan in whole or in part. No amendment shall have the effect of
             retroactively depriving Participants or Beneficiaries of rights already accrued
             under the Plan. Upon termination of the Plan, the Committee may, in its sole and
             absolute discretion, and notwithstanding any other provision hereunder to the
             contrary, direct that all benefits hereunder will be paid as soon as
             administratively practicable thereafter.

                                                     ARTICLE XII

                                              GENERAL AND MISCELLANEOUS

                  12.1 In the event that any provision of this Plan shall be declared illegal
             or invalid for any reason, said illegality or invalidity shall not affect the
             remaining provisions of this Plan but shall be fully severable and this Plan
             shall be construed and enforced as if said illegal or invalid provision had
             never been inserted herein.

                  12.2 The Section headings and numbers are included only for convenience of
             reference and are not to be taken as limiting or extending the meaning of any of
             the terms and provisions


                                                         -11-



             of this Plan. Whenever appropriate, words used in the singular shall include the
             plural or the plural may be read as the singular.

                  12.3 The validity and effect of this Plan and the rights and obligations of
             all persons affected hereby shall be construed and determined in accordance with
             the laws of the State of Texas unless superseded by federal law.

                  12.4 The Company is not required to set aside any assets for payment of the
             benefits provided under this Plan. A Participant shall have no security interest
             in any amounts credited hereunder on such Participant's behalf. It is the
             Company's intention that this Plan be construed as a plan which is unfunded and
             maintained primarily for the purpose of providing deferred compensation for a
             select group of highly compensated employees.

                  12.5 All amounts payable hereunder shall be reduced by any and all federal,
             state and local taxes imposed upon the Participant or a Beneficiary which are
             required to be paid or withheld by the Company.

                  IN WITNESS WHEREOF, Dean Foods Company, the Company, has caused this
             document to be executed on this _____ day of March, 2005, but effective as of
             the first day of January, 2005.

                                                           COMPANY:

Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                DEAN FOODS COMPANY


                                                By:
                                                      ------------------------------------


                                              -12-




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                                    .
                                                                                                    .
                                                                                                    .
                                                                                         EXHIBIT 10.6


                                                DEAN FOODS COMPANY
                                       EXECUTIVE INCENTIVE COMPENSATION PLAN



             PURPOSE:                         To (i) align executive compensation with the long-term
                                              interests of our shareholders, (ii) motivate executive
                                              management to create sustained shareholder value, and
                                              (iii) ensure retention of key executive personnel by
                                              ensuring that compensation remains competitive.

             PARTICIPANTS:                    The executive officers of Dean Foods Company, including
                                              the Chief Executive Officer ("CEO"), the Chief
                                              Financial Officer, the Chief Administrative Officer and
                                              General Counsel and the Senior Vice President -
                                              Corporate Development of Dean Foods Company ("Dean
                                              Foods"), the President of the Dean Dairy Group, and the
                                              President of WhiteWave Foods (the "Participants").

             TARGET BONUS:                    Each Participant will have a target bonus equal to a
                                              specified percentage of his or her base salary that
                                              could range from approximately 50% to 150% of his or
                                              her base salary, as determined by the Compensation
                                              Committee of the Board of Directors of Dean Foods (the
                                              "Committee") in its sole discretion (the "Target
                                              Bonus"). The amount of the Target Bonus to be paid will
                                              range from 0% to 200% of the Target Bonus, depending on
                                              the level of achievement of the performance criteria
                                              established

              by the Committee.

             CORPORATE PARTICIPANT            Each executive officer of Dean Foods who is a
             BONUS CRITERIA:                  Participant in the Plan, other than the Presidents of
                                              Dean Dairy Group and WhiteWave Foods, (the "Corporate
                                              Participants") will be eligible to receive incentive
                                              compensation based on Dean Foods' achievement of its
                                              (i) adjusted earnings per share target for each
                                              calendar year and (ii) targeted growth in adjusted
                                              earnings per share over the prior year, in each case as
                                              determined each year and as may be modified from time
                                              to time by the Committee.

                                              EPS TARGET COMPONENT. 40%(1) of a Corporate
                                              Participant's Target Bonus will be determined based
                                              upon the percentage that Dean Foods' fully diluted
                                              earnings per share for the year, before non-recurring
                                              items and restructuring charges ("Adjusted EPS") bears
                                              to the Adjusted EPS target (the "EPS Target Component")
                                              and the payout percentages determined by the Committee.
                                              No bonuses will be paid based on the EPS Target
                                              Component unless Adjusted EPS exceeds a specified
                                              minimum percentage of the Adjusted EPS target,
                                              which percentage shall be determined annually
                                              by the Committee.

                                              EPS GROWTH COMPONENT. 40%(1) of a Corporate
                                              Participant's Target Bonus will be determined based on
                                              growth in Adjusted EPS over the prior year's Adjusted
                                              EPS (the "EPS Component") and the payout percentages
                                              determined by the Committee. No bonuses will be paid
                                              based on the EPS Growth Component unless the growth in
                                              Adjusted EPS equals or exceeds the growth target
                                              established by the Committee.
             </TABLE>

             ----------
             (1) 50% for CEO


                                                                                                    1



Source: DEAN FOODS CO, 10-K, March 16, 2005
                                              INDIVIDUAL COMPONENT. The remaining 20% of the Target
                                              Bonus for each Corporate Participant (other than the
                                              CEO) will be determined based on the Individual
                                              Component described below.

             WHITEWAVE FOODS                  80% of the Target Bonus for the President of WhiteWave
             CRITERIA:                        Foods will be based on the business unit achieving
                                              specified targets for (i) net sales, (ii) operating
                                              margin and (iii) operating income (before management
                                              fees) for the year, as determined annually by the
                                              Committee.

                                              Performance against the specified targets will be
                                              determined by calculating the percentage that actual
                                              performance in each category bears to the applicable
                                              target and averaging the three percentages (the
                                              "Average Performance Percentage") and applying the
                                              payout percentages determined by the Committee.

                                              The remaining 20% of the Target Bonus for each
                                              WhiteWave Participant will be based on the Individual
                                              Component described below.

             DAIRY GROUP CRITERIA:            40% of the Target Bonus for the President of the Dairy
                                              Group (the "Growth Component") will be based on the
                                              growth in operating income for the Dairy Group for the
                                              year over operating income for the preceding year, as
                                              the same may be adjusted by the Compensation Committee
                                              (the "Baseline Operating Income"), (i) 40% of his
                                              Target Bonus (the "Operating Income Component") will be
                                              based on the Dairy Group achieving its annual operating
                                              income target as determined annually by the Committee
                                              (the "Operating Income Target") and (ii) the remaining
                                              20% of his Target Bonus will be based on the Individual
                                              Component described below. No portion of the Growth
                                              Component of the Target Bonus will be paid unless
                                              actual operating income exceeds minimum specified
                                              growth over the prior year's Baseline Operating Income
                                              as determined annually by the Committee.



                                                                                                      2




                                              Any operating income resulting from acquisitions made
                                              during the year (or directly related costs) shall be
                                              excluded from the calculation of annual operating
                                              income for purposes of both the Growth Component and
                                              the Operating Income Component.

             INDIVIDUAL COMPONENT:            A portion (20%) of the Target Bonus of each Participant
                                              (other than the CEO) will be based on his or her
                                              attainment of individual performance objectives
                                              established or approved by the Committee and
                                              generally relating to (i) promoting and instituting a
                                              culture of compliance with the Company's Code of
                                              Ethics and other policies, and (ii) the achievement of
                                              financial, operating or strategic goals established
                                              from time to time, with the balance of the Target Bonus
                                              (80%) being determined based on the other components
                                              applicable to such Participant. In the event the
                                              individual's business unit or company results exceed
                                              targets, the individual payout percentage will be
                                              increased (but not decreased) by the applicable payout
                                              percentage for such company or business unit.

             ADJUSTMENT OF TARGETS:           Upon the recommendation of the CEO, the Committee may
                                              (but has no obligation to) adjust any of the bonus
                                              targets upon the occurrence of extraordinary events or
                                              circumstances. Significant acquisitions or dispositions
                                              of assets or companies or issuances or repurchases of
                                              common stock or other equity interests may, at the
                                              Committee's discretion, result in an adjustment to a
                                              target.

Source: DEAN FOODS CO, 10-K, March 16, 2005
             ELIGIBILITY:                     A Participant must be a full time employee as of the
                                              date payments under the Plan are made to be eligible to
                                              receive a bonus. Bonus payments are typically made
                                              within 60 days of the end of the applicable measurement
                                              year.

             SPECIAL AWARDS:                  Upon recommendation of the CEO, the Committee may make
                                              special awards to Participants in the Plan in
                                              recognition of extraordinary achievement which has
                                              created or will create long-term value for Dean Foods
                                              and its shareholders. These awards may take the form of
                                              restricted stock, stock options or additional cash
                                              compensation.



                                                                                                    3




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                    EXHIBIT 10.8


                                                DEAN FOODS COMPANY

                                      SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


                                                                                               .
                                                                                               .
                                                                                               .

                                                DEAN FOODS COMPANY

                                      SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                                 Table of Contents



                                                                                            Page
                                                                                            ----

             ARTICLE I         DEFINITIONS...............................................     1

             ARTICLE II        ELIGIBILITY...............................................     3

             ARTICLE III       CREDITS TO ACCOUNT........................................     3

             ARTICLE IV        BENEFITS..................................................     3

             ARTICLE V         ADMINISTRATION OF THE PLAN................................     4

             ARTICLE VI        CLAIMS REVIEW PROCEDURE...................................     5

             ARTICLE VII       LIMITATION OF RIGHTS......................................     6

             ARTICLE VIII      LIMITATION OF ASSIGNMENT AND PAYMENTS TO LEGALLY
                                  INCOMPETENT DISTRIBUTEE................................     7

             ARTICLE IX        AMENDMENT TO OR TERMINATION OF THE PLAN...................     7

             ARTICLE X         GENERAL AND MISCELLANEOUS.................................     7




                                                DEAN FOODS COMPANY
                                      SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                                     PREAMBLE

                  WHEREAS, Dean Foods Company (the "Company") has determined that employees
             who earn compensation in excess of the compensation that can be taken into
             account under the Dean Foods 401(k) Plan (the "401(k) Plan") do not receive
             retirement benefits from the Company that are equivalent, as a percentage of
             total compensation, to the benefits provided to other employees;

                  WHEREAS, due the statutory limitations applicable to the 401(k) Plan, such
             highly compensated employees may not receive adequate benefits from the 401(k)
             Plan to adequately provide for their retirement needs;

                  WHEREAS, the Company has determined that it is appropriate to provide
             additional benefits to such employees in a nonqualified deferred compensation
             arrangement with respect to the compensation that cannot be taken into account
             under the 401(k) Plan;

                  NOW, THEREFORE, the Company hereby adopts the Dean Foods Company
             Supplemental Executive Retirement Plan (the "Plan"), reading as follows:

                                                    ARTICLE I

                                                   DEFINITIONS

                  1.1 "Account" shall mean the individual bookkeeping record established by
             the Committee showing the monetary value of the interest in the Plan of each
             Participant or Beneficiary.

                   1.2 "Affiliate" shall mean a member of a controlled group of corporations

Source: DEAN FOODS CO, 10-K, March 16, 2005
             (as defined in Section 414(b) of the Code), a group of trades or businesses
             (whether or not incorporated) which are under common control (as defined in
             Section 414(c) of the Code), or an affiliated service group (as defined in
             Section 414(m) of the Code) of which the Company is a member; and any entity
             otherwise required to be aggregated with the Company pursuant to Section 414(o)
             of the Code or the regulations issued thereunder; and any other entity in which
             the Company has an ownership interest and to which the Company elects to make
             participation in the Plan available.

                  1.3 "Beneficiary" shall mean the Beneficiary designated by each Participant
             under the 401(k) Plan; provided, however, that a Participant may designate a
             different Beneficiary hereunder by delivering to the Committee a written
             beneficiary designation, in the form provided by the Committee, and executed
             specifically with respect to this Plan.

                   1.4 "Board" shall mean the Board of Directors of the Company.



                  1.5 "Code" shall mean the Internal Revenue Code of 1986, as it may be
             amended from time to time, and the rules and regulations promulgated thereunder.

                   1.6 "Committee" shall mean the Compensation Committee of the Board.

                   1.7 "Company" shall mean Dean Foods Company or its successor or successors.

                  1.8 "Covered Compensation" shall mean the total salary and bonuses paid by
             the Company or an Affiliate to an employee as remuneration for personal services
             rendered during each Plan Year, as reported on the employee's federal income tax
             withholding statement or statements (IRS Form W-2 or its subsequent equivalent),
             together with any amounts not includable in such employee's gross income
             pursuant to Sections 125 or 402(g) of the Code, any amounts deferred by such
             employee pursuant to the Dean Foods Company Post-2004 Executive Deferred
             Compensation Plan, and any amounts withheld from such salary or bonuses pursuant
             to a court order.

                  1.9 "Disability" shall mean the Participant either (a) is unable to engage
             in any substantial gainful activity by reason of any medically determinable
             physical or mental impairment which can be expected to result in death or can be
             expected to last for a continuous period of not less than 12 months, or (b) is,
             by reason of any medically determinable physical or mental impairment which can
             be expected to result in death or can be expected to last for a continuous
             period of not less than 12 months, receiving income replacement benefits for a
             period of not less than 3 months under an accident and health plan covering
             employees of the Company.

                   1.10 "Effective Date" shall mean January 1, 2005.

                  1.11 "Excess Compensation" shall mean that portion of the Participant's
             Covered Compensation which is in excess of the limitation found in Section
             401(a)(17) of the Code, or its successor, for the Plan Year.

                  1.12 "Participant" shall mean an individual who earns Excess Compensation
             during a Plan Year or in a prior Plan Year on or after January 1, 2005.

                   1.13 "Plan" shall mean the Dean Foods Company Supplemental Executive
             Retirement Plan set forth in this document, as it may be amended from time to
             time.

                  1.14 "Plan Year" shall mean the twelve-month period beginning each January
             1 and ending each December 31.

                  1.15 "Trust" shall mean the Dean Foods Company Supplemental Executive
             Retirement Trust.

                  1.16 "Valuation Date" shall mean each business day on which the financial
             markets are open for trading activity or such other dates as may be established
             by the Committee.


                                                     -2-



                                                 ARTICLE II

                                                 ELIGIBILITY

                  A Participant shall participate in the Plan each Plan Year, commencing in
             2005, in which he or she has Excess Compensation. A Participant who has Excess

Source: DEAN FOODS CO, 10-K, March 16, 2005
             Compensation for a Plan Year shall be entitled to continue to participate in the
             Plan until his or her Account is paid in full even though the Participant may
             not be entitled to credits to his or her Account during one or more Plan Years
             because such Participant does not have Excess Compensation.

                                                     ARTICLE III

                                                  CREDITS TO ACCOUNT

                  3.1 The Committee shall credit to a Participant's Account an amount equal
             to 4% of such Participant's Excess Compensation for the Plan Year. Such credit
             shall be made on or before March 15th of the Plan Year following the Plan Year
             in which such Excess Compensation is paid. An amount equal to the amount
             credited to the Participant's Account shall be transferred to the Trust by March
             31st of the Plan Year following the Plan Year in which the Excess Compensation
             is paid.

                  3.2 At such times as is allowed by the Committee and pursuant to the
             procedure specified by the Committee, the Participant shall designate, from the
             investment alternatives selected by the Committee, the investments in which the
             Participant's Account will be deemed to be invested for purposes of determining
             the amount of earnings to be credited to that Account. On the basis selected by
             the Committee, the Committee shall credit to each Participant's Account an
             amount equal to the interest, earnings or losses that would have resulted to the
             Account if the amounts credited to the Account were invested as elected by the
             Participant.

                                                      ARTICLE IV

                                                       BENEFITS

                  4.1 After the death of a Participant, the Beneficiary of such Participant
             shall be paid in a lump sum the entire value of all amounts credited to such
             Participant's Account, determined as of the Valuation Date coincident with or
             immediately preceding the date of distribution.

                  4.2 As soon as administratively possible after the Committee determines
             that the Participant has a Disability, such Participant shall be paid in a lump
             sum the entire value of all amounts credited to such Participant's Account,
             determined as of the Valuation Date coincident with or immediately preceding the
             date of distribution.

                  4.3 After a Participant's employment terminates, such Participant shall be
             paid in a lump sum the entire value of all amounts credited to the Account of
             such Participant, determined as of the Valuation Date coincident with or
             immediately preceding the date of distribution.


                                                          -3-



                  4.4 To the extent allowed by regulations issued by the U.S. Department of
             the Treasury, if there is a change in the ownership or effective control of the
             employer of the Participant (or the employer's parent) or in the ownership of a
             substantial portion of the assets of the employer of the Participant
             (hereinafter collectively called a "Change in Control"), the Plan shall
             distribute the Accounts of all Participants employed by such employer or its
             subsidiaries impacted by such Change in Control, in a single lump sum within 30
             days after such Change in Control or at such later date as is required by such
             regulations. The determination of whether a Change in Control has occurred and
             whether a distribution may be made to the Participants shall be made based on
             the definition of a Change in Control that is found in the regulations issued by
             the U.S. Department of the Treasury under Section 409A of the Code, which
             regulations are incorporated herein by reference.

                                                      ARTICLE V

                                              ADMINISTRATION OF THE PLAN

                  5.1 The Plan shall be administered by the Committee. The members of the
             Committee shall not receive compensation with respect to their services for the
             Committee. The members of the Committee shall serve without bond or security for
             the performance of their duties hereunder unless applicable law makes the
             furnishing of such bond or security mandatory or unless required by the Company.

                  5.2 The Committee shall perform any act which the Plan authorizes expressed
             by a vote at a meeting or in a writing signed by a majority of its members
             without a meeting. The Committee may, by a writing signed by a majority of its
             members, appoint any member of the Committee to act on behalf of the Committee.

Source: DEAN FOODS CO, 10-K, March 16, 2005
             Any person who is a member of the Committee shall not vote or decide upon any
             matter relating solely to such member or vote in any case in which the
             individual right or claim of such member to any benefit under the Plan is
             particularly involved. If, in any matter or case in which a person is so
             disqualified to act, the remaining persons constituting the Committee cannot
             resolve such matter or case, the Board will appoint a temporary substitute to
             exercise all the powers of the disqualified person concerning the matter or case
             in which such person is disqualified.

                  5.3 The Committee may designate in writing other persons to carry out its
             responsibilities under the Plan, and may remove any person designated to carry
             out its responsibilities under the Plan by notice in writing to that person. The
             Committee may employ persons to render advice with regard to any of its
             responsibilities. All usual and reasonable expenses of the Committee shall be
             paid by the Company. The Company shall indemnify and hold harmless each member
             of the Committee from and against any and all claims and expenses (including,
             without limitation, attorneys' fees and related costs), in connection with the
             performance by such member of duties in that capacity, other than any of the
             foregoing arising in connection with the willful neglect or willful misconduct
             of the person so acting.

                  5.4 The Committee shall establish rules and procedures, not contrary to the
             provisions of the Plan, for the administration of the Plan and the transaction
             of its business. The Committee shall determine the eligibility of any individual
             to participate in the Plan, shall interpret the Plan in its sole and absolute
             discretion, and shall determine all questions arising in the administration,


                                                         -4-



             interpretation and application of the Plan. All determinations of the Committee
             shall be conclusive and binding on all employees, Participants and
             Beneficiaries.

                  5.5 Any action to be taken hereunder by the Company shall be taken by
             resolution adopted by the Board or by a committee thereof; provided, however,
             that by resolution, the Board or a committee thereof may delegate to any officer
             of the Company the authority to take any such actions hereunder.

                                                     ARTICLE VI

                                              CLAIMS REVIEW PROCEDURE

                  6.1 In the event that a Participant or Beneficiary is denied a claim for
             benefits under this Plan (the "Claimant"), the Committee shall provide to the
             Claimant written notice of the denial within 90 days after the claim is filed
             (45 days in the case of a Disability claim) unless an extension of time for
             processing the claim is necessary because more information is needed (or, in the
             case of a Disability claim, an extension is necessary for reasons beyond the
             control of the Committee), in which case a decision will be rendered not later
             than 180 days (75 days in the case of a Disability claim which may be further
             extended to 105 days if the additional extension is necessary due to reasons
             beyond the control of the Committee) after the initial receipt of the claim. If
             such an extension of time for processing the claim is required, written notice
             of the extension and additional information that is necessary to process the
             claim will be furnished to the Claimant prior to the expiration of the initial
             90-day (or 45-day) period and will indicate the special circumstances requiring
             an extension of time for processing the claim and will indicate the date the
             Committee expects to render its decision. In no event will such extension exceed
             a period of 90 days from the end of the initial period. The notice shall set
             forth:

                   (a)   the specific reason or reasons for the denial;

                   (b)   specific references to pertinent Plan provisions on which the
                         Committee based its denial;

                   (c)   a description of any additional material or information needed for the
                         Claimant to perfect the claim and an explanation of why the material
                         or information is needed;

                   (d)   if the claim is a claim for a Disability benefit, the Participant will
                         be notified if an internal rule, guideline, protocol or other similar
                         criterion was relied on by the Committee and the Participant will be
                         provided with a copy of such rule, guideline, protocol, or other
                         criterion free of charge on the Participant's request. If the claim is
                         a claim for a Disability benefit and the denial is based on a medical
                         necessity or other similar exclusion or limit, the Participant will be

Source: DEAN FOODS CO, 10-K, March 16, 2005
                         provided, free of charge at his or her request, an explanation of how
                         that exclusion or limit and any clinical judgments apply to the
                         Participant's medical circumstances.

                   (e)   a statement that the Claimant may:

                         (i)   request a review upon written application to the Committee;


                                                       -5-



                         (ii) review pertinent Plan documents; and

                         (iii) submit issues and comments in writing; and

                   (f)   that any appeal the Claimant wishes to make of the adverse
                         determination must be in writing and received by the Committee within
                         60 days (180 days in the case of a Disability claim) after receipt of
                         the Committee's notice of denial of benefits. The Committee's notice
                         must further advise the Claimant that failure to appeal the action to
                         the Committee in writing within the 60-day (or 180-day) period will
                         render the Committee's determination final, binding, and conclusive.

                  6.2 If the Claimant should appeal to the Committee, the Claimant, or the
             duly authorized representative of such Claimant, may submit, in writing,
             whatever issues and comments such Claimant, or the duly authorized
             representative of such Claimant, feels are pertinent. The Committee shall
             re-examine all facts related to the appeal and make a final determination as to
             whether the denial of benefits is justified under the circumstances. The
             Committee shall advise the Claimant in writing of its decision on the appeal,
             the specific reasons for the decision, and the specific Plan provisions on which
             the decision is based. The notice of the decision shall be given within 60 days
             (45 days in the case of a Disability claim) of the Claimant's written request
             for review, unless special circumstances (such as a hearing) would make the
             rendering of a decision within the 60-day (or 45-day) period infeasible, but in
             no event shall the Committee render a decision regarding the denial of a claim
             for benefits later than 120 days (90 days in the case of a Disability claim)
             after its receipt of a request for review. If an extension of time for review is
             required because of special circumstances, written notice of the extension shall
             be furnished to the Claimant prior to the date the extension period commences.
             The Claimant will also be entitled to receive, on request and free of charge,
             access to and copies of all documents, records, and other information relevant
             to the claim. In addition, if the claim is a claim for a Disability benefit, the
             Participant will be notified if an internal rule, guideline, protocol or other
             similar criterion was relied on by the Committee and will be provided with a
             copy of such rule, guideline, protocol, or other criterion free of charge at
             your request. If the claim is a claim for a Disability benefit and the denial is
             based on a medical necessity or other similar exclusion or limit, the
             Participant will be provided, free of charge at his or her request, an
             explanation of how that exclusion or limit and any clinical judgments apply to
             the Participant's medical circumstances. In the case of a Disability claim, the
             review on appeal must be made by a different decision-maker from the Committee
             and that decision-maker cannot give procedural deference to the original
             decision. If the Claimant is dissatisfied with the Committee's (or other
             independent fiduciary's) review decision, the Claimant has the right to file
             suit in a federal or state court.

                                                  ARTICLE VII

                                              LIMITATION OF RIGHTS

                  The establishment of this Plan shall not be construed as giving to any
             Participant, employee of the Company or any person whomsoever, any legal,
             equitable or other rights against the Company, or its officers, directors,
             agents or shareholders, or as giving to any Participant or Beneficiary any
             equity or other interest in the assets or business of the Company or shares of


                                                       -6-



             Company stock or as giving any employee the right to be retained in the
             employment of the Company. All employees of the Company and Participants shall
             be subject to discharge to the same extent they would have been if this Plan had
             never been adopted.

                                                  ARTICLE VIII

Source: DEAN FOODS CO, 10-K, March 16, 2005
                                       LIMITATION OF ASSIGNMENT AND PAYMENTS
                                        TO LEGALLY INCOMPETENT DISTRIBUTEE

                  8.1 No benefits which shall be payable under the Plan to any person shall
             be subject in any manner to anticipation, alienation, sale, transfer,
             assignment, pledge, encumbrance or charge, and any attempt to anticipate,
             alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose
             of the same shall be void. No benefit shall in any manner be subject to the
             debts, contracts, liabilities, engagements or torts of any person, nor shall it
             be subject to attachment or legal process for or against any person, except to
             the extent required by law.

                  8.2 Whenever any benefit which shall be payable under the Plan is to be
             paid to or for the benefit of any person who is then a minor or determined by
             the Committee, on the basis of qualified medical advice, to be incompetent, the
             Committee need not require the appointment of a guardian or custodian, but shall
             be authorized to cause the same to be paid over to the person having custody of
             the minor or incompetent, or to cause the same to be paid to the minor or
             incompetent without the intervention of a guardian or custodian, or to cause the
             same to be paid to a legal guardian or custodian of the minor or incompetent, if
             one has been appointed, or to cause the same to be used for the benefit of the
             minor or incompetent.

                                                     ARTICLE IX

                                      AMENDMENT TO OR TERMINATION OF THE PLAN

                  The Board and the Committee reserve the right at any time to amend or
             terminate the Plan in whole or in part. No amendment shall have the effect of
             retroactively depriving Participants or Beneficiaries of rights already accrued
             under the Plan. Upon termination of the Plan, the Committee may, in its sole and
             absolute discretion, and notwithstanding any other provision hereunder to the
             contrary, direct that all benefits hereunder will be paid as soon as
             administratively practicable thereafter.

                                                     ARTICLE X

                                              GENERAL AND MISCELLANEOUS

                  10.1 In the event that any provision of this Plan shall be declared illegal
             or invalid for any reason, said illegality or invalidity shall not affect the
             remaining provisions of this Plan but shall be fully severable and this Plan
             shall be construed and enforced as if said illegal or invalid provision had
             never been inserted herein.


                                                         -7-



                  10.2 The Article headings and numbers are included only for convenience of
             reference and are not to be taken as limiting or extending the meaning of any of
             the terms and provisions of this Plan. Whenever appropriate, words used in the
             singular shall include the plural or the plural may be read as the singular.

                  10.3 The validity and effect of this Plan and the rights and obligations of
             all persons affected hereby shall be construed and determined in accordance with
             the laws of the State of Texas unless superseded by federal law.

                  10.4 A Participant shall have no security interest in any amounts credited
             hereunder on such Participant's behalf. It is the Company's intention that this
             Plan be construed as a plan which is unfunded and maintained primarily for the
             purpose of providing deferred compensation for a select group of highly
             compensated employees.

                  10.5 All amounts payable hereunder shall be reduced by any and all federal,
             state and local taxes imposed upon the Participant or a Beneficiary which are
             required to be paid or withheld by the Company.

                  IN WITNESS WHEREOF, Dean Foods Company, the Company, has caused its
             corporate seal to be affixed hereto and these presents to be duly executed in
             its name and behalf by its proper officers thereunto duly authorized this _____
             day of November, 2004.

                                                          DEAN FOODS COMPANY


                                                          By:
                                                                ------------------------------------

Source: DEAN FOODS CO, 10-K, March 16, 2005
                                              -8-




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                  Exhibit 10.9

                       DESCRIPTION OF COMPENSATION ARRANGEMENTS FOR EXECUTIVE OFFICERS

                   Set forth below is a description of the compensation arrangements for each
             of our executive officers. The compensation arrangements consist of salary,
             annual incentive compensation, equity awards and certain perquisites. Each of
             our executive officers is an at-will employee of the company and we do not have
             agreements with any of our executive officers except as set forth below.

                   The cash salary and bonus payable to each executive officer for 2005 is
             set forth below.



             NAME AND POSITION         2005 BASE SALARY   2005 TARGET BONUS %
             -----------------         ----------------   -------------------

             Gregg L. Engles           $      1,070,000                 120
             Michelle P. Goolsby                470,000                  65
             Barry A. Fromberg                  435,000                  65
             Ronald H. Klein                    310,000                  50
             Pete Schenkel                      676,832                  90


                   Annual cash bonus awards are determined in accordance with the Dean Foods
             Company Executive Incentive Compensation Plan, which is filed as Exhibit 10.6 to
             our Annual Report on Form 10-K for the year ended December 31, 2004. Awards of
             equity compensation are made in accordance with our 1997 Seventh Amended and
             Restated Stock Option and Restricted Stock Plan and our 1989 Third Amended and
             Restated Stock Award Plan (or any successor plans), filed as Exhibits 10.1 and
             10.2, respectively, to our Annual Report on Form 10-K for the year ended
             December 31, 2004.

                   All executive officers are eligible to participate in our Post-2004
             Executive Deferred Compensation Plan, filed as Exhibit 10.3 to our Annual Report
             on Form 10-K for the year ended December 31, 2004.

                   Our executive officers are entitled to all benefits generally available to
             all employees. In addition, our executive officers receive certain benefits
             payable under our Supplemental Executive Retirement Plan, filed as Exhibit 10.8
             to our Annual Report on Form 10-K for the year ended December 31, 2004, for the
             benefit of employees who receive salary and cash bonus in excess of the amount
             which IRS regulations allow to be taken into account under a 401K plan. Our
             executives also receive an annual physical examination benefit. Certain
             executive officers occasionally use our company planes for personal travel. Mr.
             Schenkel receives an automobile allowance and certain club memberships. Also,
             pursuant to certain agreements between Mr. Schenkel and our Southern Foods
             subsidiary that pre-date our purchase of that business from Mr. Schenkel in
             January 2000, Mr. Schenkel receives a lifetime supplemental health insurance
             benefit for himself and his wife.



                   Finally, we have entered into certain Change in Control agreements with
             our executive officers in the forms filed as Exhibits 10.18 and 10.19 to our
             Annual Report on Form 10-K for the year ended December 31, 2004.




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                 Exhibit 10.10


                       Description of Non-Employee Director Compensation Arrangements


                         Set forth below is a description of the compensation arrangements
             for our non-employee directors.

                         All non-employee directors receive an annual retainer of $35,000,
             payable quarterly in arrears. Members of the Audit and Compensation Committees
             receive an additional $5,000 per year retainer for serving on those Committees,
             while members of the other Committees of the Board receive an additional $2,000
             per year retainer for each Committee on which he or she serves. The Chairperson
             of each of the Audit and Compensation Committees receives a $10,000 per year fee
             for his service as Chairperson, and the Chairperson of each of the Governance
             and Strategic Planning Committees receives a $4,000 per year for his or her
             service as Chairperson of those Committees.

                         Each non-employee director also receives an additional $3,000 for
             each meeting (whether Board of Directors or Committee) attended in person and
             $1,000 for each meeting (whether Board of Directors or Committee) attended
             telephonically. We reimburse our non-employee directors for, or pay directly,
             all expenses related to attending Board and Committee meetings.

                         Non-employee directors may elect to receive all of the foregoing
             fees in shares of restricted common stock rather than in cash. If a director
             makes this election, he or she will receive shares with a value equal to 150% of
             the cash amount owed to him or her. One third of the restricted shares vest on
             the date of grant; one-third vest on the first anniversary of the grant date;
             and the final 1/3 vest on the second anniversary of the grant date.

                         Finally, our non-employee directors receive an annual grant of 5,000
             immediately exercisable stock options, plus 1,700 stock units that vest over a
             3-year term. All non-employee director equity awards are made under our 1997
             Seventh Amended and Restated Stock Option and Restricted Stock Plan and our 1989
             Third Amended and Restated Stock Award Plan (or any successor plans), filed as
             Exhibits 10.1 and 10.2, respectively, to our Annual Report on Form 10-K for the
             year ended December 31, 2004.




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                EXHIBIT 10.13

                                              EMPLOYMENT AGREEMENT

                   EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of January 27, 2005, by
             and between Dean Specialty Foods Holdings, Inc., a Delaware corporation (the
             "COMPANY"), and Sam K. Reed (the "EXECUTIVE").

                                              W I T N E S S E T H:

                   WHEREAS, the Company's parent corporation, Dean Foods Company ("DEAN"),
             intends, subject to certain conditions, to distribute the common stock, par
             value $.01 per share, of the Company (the "COMMON STOCK") owned by Dean to its
             shareholders, whereby the Company would become a stand-alone publicly traded
             corporation;

                   WHEREAS, Executive is willing to enter into this Agreement in anticipation
             of the Company becoming a stand-alone publicly traded corporation through the
             distribution of the Common Stock to Dean's shareholders;

                   WHEREAS, to effect such a spin-off and to position the Company to maximize
             its value for Dean's shareholders, it is necessary that the Company have a
             strong and experienced management team with a proven track record in developing
             and growing a company in the consumer packaged goods industry;

                   WHEREAS, Executive is one of several members of a management team (the
             "TEAM") that possesses the skills and experience necessary to undertake the
             challenges of developing the Company, including through acquisitions;

                   WHEREAS, in light of these skills and experience, the Company desires to
             secure the services of Executive and the other members of the Team, and is
             willing to enter into this Agreement embodying the terms of the employment of
             Executive by the Company, which terms include one or more substantial
             equity-based compensation awards; and

                   WHEREAS, Executive is willing to accept such employment and enter into
             such Agreement, subject to Dean making available to Executive and to the other
             members of the Team the opportunity to invest in the common stock of the Company
             and making the undertakings regarding the governance and management of the
             Company set forth in the in the stockholders agreement (the "STOCKHOLDERS
             AGREEMENT") to be entered into by the Company, Dean, Executive, other members of
             the Team, and certain other investors who are affiliates of the Team
             contemporaneously with this Agreement; and

                   WHEREAS, in order to give Executive and the Team the opportunity to
             acquire an equity interest in the Company and as an incentive for Executive to
             participate in the affairs of the Company, the Company is willing to sell to
             Executive, and Executive

                                                       1



             desires to purchase, shares of common stock (the "COMMON STOCK"), subject to the
             terms and conditions set forth in the Subscription Agreement (the "SUBSCRIPTION
             AGREEMENT") to be entered into contemporaneously with this Agreement and in the
             Stockholders Agreement.

                   NOW, THEREFORE, in consideration of the mutual covenants herein contained,
             the Company and Executive hereby agree as follows:

                1. Employment. Upon the terms and subject to the conditions of this Agreement
             and, unless earlier terminated as provided in Section 8, the Company hereby
             employs Executive and Executive hereby accepts employment by the Company for the
             period (i) commencing on the date hereof (the "COMMENCEMENT DATE") and (ii)
             ending on the third anniversary of (A) the Commencement Date or, (B) if the
             Common Stock shall become registered under Section 12(g) of the Securities
             Exchange Act of 1934, as amended (the "EXCHANGE ACT"), during the term hereof,
             the third anniversary of the date such registration shall have become effective
             and trading of Common Stock on a registered national securities exchange or
             automated quotation system (including, but not limited to, NASDAQ) shall have
             commenced (the "REGISTRATION DATE"); provided, however, that the term of this
             Agreement shall automatically be extended for one additional year on the third
             anniversary of the Registration Date and each subsequent anniversary thereof
             unless not less than 90 days prior to such anniversary date either party shall
             give the other written notice that he or it does not want the term to extend as
             of such anniversary date. The period during which Executive is employed pursuant
             to this Agreement (including pursuant to any extension of the term hereof

Source: DEAN FOODS CO, 10-K, March 16, 2005
             pursuant to the proviso in the immediately preceding sentence) shall be referred
             to herein as the "EMPLOYMENT PERIOD."

                2. Position and Duties. During the Employment Period, Executive shall serve
             as the Chairman of the Board and Chief Executive Officer of the Company and in
             such other position or positions with the Company and its majority-owned
             subsidiaries consistent with the foregoing position as the Board of Directors of
             the Company (the "BOARD") may specify or the Company and Executive may mutually
             agree upon from time to time. During the Employment Period, Executive shall have
             the duties, responsibilities and obligations customarily assigned to individuals
             at comparable publicly traded companies serving in the position or positions in
             which Executive serves hereunder. Executive shall devote substantially all his
             business time to the services required of him hereunder, except for vacation
             time and reasonable periods of absence due to sickness, personal injury or other
             disability, and shall perform such services to the best of his abilities.
             Subject to the provisions of Section 9, nothing herein shall preclude Executive
             from (i) engaging in charitable activities and community affairs, (ii) managing
             his personal investments and affairs or (iii) serving on the board of directors
             or other governing body of any corporate or other business entity, so long as
             such service is not in violation of the covenants contained in Section 9 or the
             governance principles established for the Company by the Board, as in effect
             from time to time, provided that in no event may

                                                    2



             such activities, either individually or in the aggregate, materially interfere
             with the proper performance of Executive's duties and responsibilities
             hereunder.

                3. Place of Performance. The Company shall establish its headquarters office
             in Chicago, Illinois metropolitan area at which Executive shall have his
             principal office. Executive shall also have an office, and perform services at,
             the Company's offices in Green Bay, Wisconsin, on such basis as Executive deems
             necessary or appropriate for the performance of his duties.

                4. Compensation.

                   (a) Base Salary. During the Employment Period, the Company shall pay
             Executive a base salary at the annual rate of $750,000. Beginning in 2006, the
             Board shall review Executive's base salary no less frequently than annually and
             may increase such base salary in its discretion. The amount of annual base
             salary payable under this Section 4(a) shall be reduced, however, to the extent
             Executive elects to defer such salary under the terms of any deferred
             compensation or savings plan or arrangement maintained or established by the
             Company or any of its subsidiaries. Executive's annual base salary payable
             hereunder, including any increased annual base salary, without reduction for any
             amounts deferred as described above, is referred to herein as "BASE SALARY". The
             Company shall pay Executive the portion of his Base Salary not deferred in
             accordance with its standard payroll practices, but no less frequently than in
             equal monthly installments.

                   (b) Incentive Compensation. For each full calendar year during the
             Employment Period, Executive shall be eligible to receive an annual incentive
             bonus from the Company, with a target bonus opportunity of not less than 100% of
             his Base Salary, which will be payable, if at all, upon the achievement by
             Executive and/or the Company of performance objectives to be established by the
             Board in consultation with the Company's Chief Executive Officer and
             communicated to Executive during the first quarter of such year (the "INCENTIVE
             COMPENSATION"). Without limiting the generality of the foregoing, the actual
             amount payable to Executive in respect of the Incentive Compensation may be more
             or less than the targeted opportunity (including zero) based on the actual
             results against the pre-established performance objectives.

                5. Stock Purchase. Substantially contemporaneously with the Commencement
             Date, Executive shall purchase the number of shares of Common Stock of the
             Company specified in the Subscription Agreement related to the purchase of such
             shares, to be entered into by Executive and the Company (the "SUBSCRIPTION
             AGREEMENT"). The terms and conditions of such purchase shall be as set forth in
             the Subscription Agreement, and such shares shall be subject to the limitations
             and restrictions, including, without limitation, the restrictions on transfer
             and the put and call rights set forth in the Stockholders Agreement.

                                                    3



                6. Public Equity Awards.


Source: DEAN FOODS CO, 10-K, March 16, 2005
                   (a) Basic Restricted Stock Grant. On the fourth trading day following the
             Registration Date, the Company shall grant Executive an award of that number of
             whole restricted shares of Common Stock (the "BASIC RESTRICTED SHARES") as is
             equal to (or most closely approximates) 0.66% of the Outstanding Common Stock on
             the date of grant. The Basic Restricted Shares shall vest and become freely
             transferable in the proportions, and based upon achievement of the total
             shareholder return objectives, determined pursuant to Schedule A hereto, so long
             as Executive is continuously employed by the Company through the applicable
             vesting date. Any Basic Restricted Shares that have not become vested and freely
             transferable on or before the fifth anniversary of the grant date shall be
             forfeited. For purposes of this Agreement, "OUTSTANDING COMMON STOCK" shall mean
             the sum of (x) the number of shares Common Stock that are issued and outstanding
             on the Registration Date and (y) the number of shares of Common Stock issuable
             pursuant to any stock options granted by Dean prior to the Registration Date in
             respect of its common stock and converted into the right to purchase Common
             Stock in connection with or in contemplation of the Spin-Off.

                   (b) Supplemental Restricted Stock Unit Grant. On the fourth trading day
             following the Registration Date, Executive shall be granted, automatically and
             without any further action on the part of the Company or the Board, an award of
             restricted stock units, with each such unit representing a right to receive one
             share of Common Stock on the terms and conditions set forth herein (the
             "SUPPLEMENTAL RESTRICTED SHARE UNITS"). The number of Supplemental Restricted
             Share Units subject to such grant shall be equal to the quotient (rounded up to
             the nearest whole number) obtained by dividing (x) by (y), where (x) and (y)
             are:

                    (x)    the product of (i) the excess, if any, of (A) the Initial Fair
                           Market Value over (B) the Adjusted Per Share Purchase Price and (ii)
                           that number of whole shares of Common Stock as is equal to (or most
                           closely approximates) 1.98% of the Outstanding Common Stock on the
                           date of grant; and

                    (y)    the Initial Fair Market Value.

                   For purposes of this Agreement, "INITIAL FAIR MARKET VALUE" shall mean the
             average of the closing values on the Registration Date and on each of the next
             four trading days immediately following the Registration Date, as reported on
             the principal exchange or automated quotation system on which the Common Stock
             is traded or reported. "ADJUSTED PER SHARE PURCHASE PRICE" shall mean the $5,000
             purchase price per share of Common Stock, appropriately adjusted to reflect any
             stock split or share combination involving the Common Stock, any
             recapitalization of the Company, any adjustment pursuant to Section 4.3(b) of
             the Stockholders Agreement, or any merger, consolidation, reorganization or
             similar corporate event involving the Company occurring

                                                      4



             on or after the Commencement Date and on or before the Registration Date.

                   The Supplemental Restricted Share Units shall vest in three equal annual
             installments on the first three anniversaries of the Registration Date, so long
             as (with respect to each installment) Executive is continuously employed by the
             Company through the applicable anniversary date. Notwithstanding the foregoing,
             no Supplemental Restricted Share Units shall become vested on any such
             anniversary date if, on such date, the average of the closing prices of a share
             of Common Stock on the principal trading market on which such shares are traded
             or reported for the 20 trading day period ended on such date (or, if such date
             is not a business day, the 20 trading day period ended on the last trading day
             occurring immediately prior thereto) does not exceed the Initial Fair Market
             Value (the "MINIMUM VALUE REQUIREMENT"). In the event that the Minimum Value
             Requirement is not satisfied on any applicable anniversary date, the
             Supplemental Restricted Share Units that would otherwise have vested on such
             anniversary date shall vest on any subsequent anniversary date or on any date
             after the third anniversary date (treating each such date as an anniversary date
             for purposes of the 20 day trading measurement period) on which both Executive
             is still an employee of the Company and the Minimum Value Requirement is
             satisfied; provided that any such Supplemental Restricted Share Units that have
             not become vested on or before the fifth anniversary of the grant date shall be
             forfeited. The shares of Common Stock corresponding to any vested Supplemental
             Restricted Share Units, if any, shall be distributed to Executive as soon as
             practicable, but not later than five (5) business days following the earlier to
             occur of (i) the fifth anniversary of the date of grant or (ii) the sixth month
             anniversary of the date Executive's employment with the Company terminates,
             unless the Executive elects (in a manner consistent with the applicable
             requirements of Section 409A of the Internal Revenue Code (the "CODE")) to defer
             the date upon which the shares of Common Stock corresponding to the vested
             Supplement Restricted Share Units shall be distributed.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                   (c) Stock Option. On the fourth trading day following the Registration
             Date, the Company shall automatically and without any further action on the part
             of the Company or the Board grant to Executive a non-qualified stock option to
             purchase the number of shares of Common Stock equal to the remainder of (i) the
             number of whole shares of Common Stock specified in Section 6(b)(x)(ii) minus
             (ii) the number of Supplemental Restricted Share Units awarded pursuant to
             Section 6(b) (the "OPTION"). The exercise price per share with respect to the
             Option shall be equal to the Initial Fair Market Value. The Option shall become
             vested and exercisable in three approximately equal annual installments on each
             of the first three anniversaries of the grant date of such Option, so long as
             Executive is continuously employed by the Company through the applicable
             anniversary date.

                   (d) Stock Incentive Plan. Each of the Basic Restricted Shares, the
             Supplemental Restricted Shares and the Option shall be granted pursuant to a
             stock incentive plan (the "INCENTIVE PLAN") to be adopted by the Company prior
             to the Registration Date that will authorize for issuance thereunder at least
             (i) 13% of the

                                                    5



             Outstanding Common Stock plus (ii) the number of shares of Common Stock issuable
             pursuant to any stock options granted by Dean prior to the Registration Date in
             respect of its common stock and converted into the right to purchase Common
             Stock in connection with or in contemplation of the Spin-Off as provided in the
             Stockholders Agreement. Such Incentive Plan shall have terms and conditions
             which will permit the issuance of the awards to the Executive specified in this
             Section 6 and shall not contain any other term or condition that has an adverse
             effect on any award to be made to Executive pursuant to this Section 6.

                   (e) Award Agreements. Each of the Basic Restricted Shares, Supplemental
             Restricted Shares and the Option shall be subject to an award agreement having
             the terms and conditions specified in the preceding subparagraphs of this
             Section 6 and otherwise consistent with the terms and conditions of the
             Incentive Plan. Each such agreement shall provide for full vesting of such
             awards upon a Change of Control and shall provide that Executive shall have the
             right to elect that any applicable tax withholding requirements with respect to
             the vesting, exercise or distribution of Common Stock be satisfied by having the
             Company withhold shares of Common Stock subject to such award having a value
             equal to the minimum required applicable tax withholding, and that Executive may
             exercise the Option using previously owned shares of Common Stock, including
             Basic Restricted Shares that are still subject to forfeiture, provided that that
             number of shares deliverable upon exercise of the Option that corresponds to the
             number of unvested Basic Restricted Shares surrendered will be subject to the
             same forfeiture provisions and restrictions on transfer as the Basic Restricted
             Shares surrendered to exercise such Option, in whole or in part.

                   (f) Capital Adjustments. Notwithstanding anything to the contrary
             contained in Section 5 or this Section 6, the exercise price of, and the number
             of Shares subject to, the Option, the number of Units subject to the
             Supplemental Restricted Share Units, and the Minimum Value Requirement shall be
             appropriately adjusted, by the Board in its sole discretion, to reflect any
             extraordinary dividend, any dividend payable in shares of capital stock, any
             stock split or share combination involving the Common Stock, any
             recapitalization of the Company, any merger, consolidation, reorganization or
             similar corporate event involving the Company occurring after the Registration
             Date.

                   (g) Impact on Future Grants. Unless following the Registration Date the
             Board shall determine that special circumstances warrant the grant of such
             additional awards as it or any duly authorized committee thereof shall, in its
             sole discretion, determine, it is the intent and expectation of the parties that
             Executive will not receive any further grants of equity-based compensation prior
             to the third anniversary of the Commencement Date. Following such third
             anniversary, Executive shall be eligible to receive equity-based compensation
             awards in accordance the Company's generally applicable compensation practices,
             as then in effect.

                                                    6



                7. Benefits, Perquisites and Expenses.

                   (a) Benefits. During the Employment Period, Executive shall be eligible to
             participate in (i) each welfare benefit plan sponsored or maintained by the
             Company for its senior executive officers, including, without limitation, each

Source: DEAN FOODS CO, 10-K, March 16, 2005
             group life, hospitalization, medical, dental, health, accident or disability
             insurance or similar plan or program of the Company, and (ii) each pension,
             profit sharing, retirement, deferred compensation or savings plan sponsored or
             maintained by the Company for its senior executive officers, in each case,
             whether now existing or established hereafter, in accordance with the generally
             applicable provisions thereof, as the same may be amended from time to time.

                   (b) Perquisites. During the Employment Period, Executive shall be entitled
             to receive such perquisites as are generally provided to other senior executive
             officers of the Company in accordance with the then current policies and
             practices of the Company.

                   (c) Business Expenses. During the Employment Period, the Company shall pay
             or reimburse Executive for all reasonable expenses incurred or paid by Executive
             in the performance of Executive's duties hereunder, upon presentation of expense
             statements or vouchers and such other information as the Company may require and
             in accordance with the generally applicable policies and procedures of the
             Company.

                   (d) Indemnification. The Company agrees that if Executive is made a party,
             or is threatened to be made a party, to any action, suit or proceeding, whether
             civil, criminal, administrative or investigative (a "PROCEEDING"), by reason of
             the fact that he is or was a director, officer or employee of the Company or any
             subsidiary or affiliate thereof, or is or was serving at the request of the
             Company as a director, officer, member, employee or agent of another
             corporation, partnership, joint venture, trust or other enterprise, including,
             in each case, service with respect to employee benefit plans, whether or not the
             basis of such Proceeding is Executive's alleged action in an official capacity
             while serving as a director, officer, member, employee or agent, Executive shall
             be indemnified and held harmless by the Company to the fullest extent legally
             permitted or authorized by the Company's certificate of incorporation or by-laws
             or resolutions of the Board or, if greater, by the laws of the State of
             Delaware, against all cost, expense, liability and loss (including, without
             limitation, attorney's fees, judgments, fines or penalties and amounts paid or
             to be paid in settlement) reasonably incurred or suffered by Executive in
             connection therewith, and such indemnification shall continue as to Executive
             even if he has ceased to be a director, officer, member, employee or agent of
             the Company or other entity and shall inure to the benefit of Executive's heirs,
             executors and administrators. If Executive serves as a director, officer,
             member, partner, employee or agent of another corporation, partnership, joint
             venture, limited liability company, trust or other enterprise (including, in
             each case, service with respect to employee benefit plans) which is a subsidiary
             or affiliate of the Company, it shall be presumed for purposes of this Section
             7(d) that Executive serves or served in such capacity at the request of the

                                                    7



             Company. The Company shall advance to Executive all reasonable costs and
             expenses incurred by him in connection with a Proceeding within 30 days after
             receipt by the Company of a written request for such advance. Such request shall
             include an undertaking by Executive to repay the amount of such advance, if it
             shall ultimately be determined that he is not entitled to be indemnified against
             such costs and expenses. The Company agrees to continue and maintain a
             directors' and officers' liability insurance policy covering Executive to the
             extent the Company provides such coverage for its other executive officers or
             directors.

                8. Termination of Employment.

                   (a) Early Termination of the Employment Period. Notwithstanding Section 1,
             the Employment Period shall end upon the earliest to occur of (i) a termination
             of Executive's employment on account of Executive's death, (ii) a Termination
             due to Disability, (iii) a Termination for Cause, (iv) a Termination Without
             Cause, (v) a Termination for Good Reason, (vi) a Termination due to Retirement
             or (vii) a Voluntary Termination.

                   (b) Termination Due to Death or Disability. In the event that Executive's
             employment hereunder terminates due to his death or as a result of a Termination
             due to Disability (as defined below), no termination benefits shall be payable
             to or in respect of Executive except as provided in Section 8(e). For purposes
             of this Agreement, "TERMINATION DUE TO DISABILITY" means a termination of
             Executive's employment upon written notice from the Company because Executive
             has been incapable, regardless of any reasonable accommodation by the Company,
             of substantially fulfilling the positions, duties, responsibilities and
             obligations set forth in this Agreement because of physical, mental or emotional
             incapacity resulting from injury, sickness or disease for a period of more than
             (i) four consecutive months or (ii) an aggregate of six months in any twelve
             month period. Any question as to the existence or extent of Executive's

Source: DEAN FOODS CO, 10-K, March 16, 2005
             disability upon which Executive and the Company cannot agree shall be determined
             by a qualified, independent physician jointly selected by the Company and
             Executive. If the Company and Executive cannot agree on the physician to make
             the determination, then the Company and Executive shall each select a physician
             and those physicians shall jointly select a third physician, who shall make the
             determination. The determination of any such physician shall be final and
             conclusive for all purposes of this Agreement. Executive or his legal
             representative or any adult member of his immediate family shall have the right
             to present to such physician such information and arguments as to Executive's
             disability as he, she or they deem appropriate, including the opinion of
             Executive's personal physician.

                   (c) Termination by the Company. The Company may terminate Executive's
             employment with the Company with or without Cause; provided that prior to the
             Registration Date, the Company may only terminate Executive's employment
             hereunder for Cause. "TERMINATION FOR CAUSE" means a termination of Executive's
             employment

                                                    8



             by the Company due to Cause. "CAUSE" means (i) Executive's conviction of a
             felony or the entering by Executive of a plea of nolo contendere to a felony
             charge, (ii) Executive's gross neglect or willful and intentional gross
             misconduct in the performance of, or willful, substantial and continual refusal
             by Executive in breach of this Agreement to perform, the duties,
             responsibilities or obligations assigned to Executive pursuant to the terms
             hereof, (iii) a TreeHouse Default (as defined in the Stockholders Agreement),
             (iv) any material breach by Executive of Section 9 of this Agreement or (v) a
             material breach by Executive of the Code of Ethics applicable to the Company's
             employees, as in effect from time to time; provided, however, that no act or
             omission shall constitute "Cause" for purposes of this Agreement unless the
             Board provides Executive, within 90 days of the Board learning of such act or
             acts or failure or failures to act, (A) written notice of the intention to
             terminate him for Cause, which notice states in detail clearly and fully the
             particular act or acts or failure or failures to act that constitute the grounds
             on which the Board reasonably believes in good faith constitutes "Cause", and
             (B) an opportunity, within thirty (30) days following Executive's receipt of
             such notice, to meet in person with the Board to explain or defend the alleged
             act or acts or failure or failures to act relied upon by the Board and, to the
             extent such cure is possible, to cure such act or acts or failure or failures to
             act. If such conduct is cured to the reasonable satisfaction of the Board, such
             notice of termination shall be revoked. Further, no act or acts or failure or
             failures to act shall be considered "willful" or "intentional" if taken in good
             faith and Executive reasonably believed such act or acts or failure or failures
             to act were in the best interests of the Company.

                   (d) Termination by Executive. Executive may terminate his employment with
             the Company for Good Reason, for Retirement or in a Voluntary Termination. A
             "TERMINATION FOR GOOD REASON" by Executive means a termination of Executive's
             employment by Executive within 90 days following (i) a reduction in Executive's
             annual Base Salary or target Incentive Compensation opportunity, (ii) the
             failure to elect or reelect Executive to any of the positions described in
             Section 2 above or the removal of him from any such position, (iii) a material
             reduction in Executive's duties and responsibilities or the assignment to
             Executive of duties and responsibilities which are materially inconsistent with
             his duties or which materially impair Executive's ability to function in the
             position specified in Section 2, (iv) a material breach of any material
             provision of this Agreement by the Company, (v) the earlier of (x) October 31,
             2005 (or such later date as the Company and Executive (or Executive's agent
             appointed pursuant to the Stockholders Agreement) shall agree) and (y) the Early
             Termination Date (as defined in the Stockholders Agreement), if the Registration
             Date has not occurred on or before such earlier date other than as a result of a
             TreeHouse Default; (vi) any material breach by the Company or Dean of the
             Stockholders Agreement; (vii) any material breach by the Company of any of the
             award agreements referenced in Section 6(e); or (viii) the failure by the
             Company to obtain the assumption agreement referred to in Section 10(b) of this
             Agreement prior to the effectiveness of any succession referred to therein,
             unless the purchaser, successor or assignee referred to therein is bound to
             perform this Agreement by operation of law. Notwithstanding the foregoing, a

                                                    9



             termination shall not be treated as a Termination for Good Reason (i) if
             Executive shall have consented in writing to the occurrence of the event giving
             rise to the claim of Termination for Good Reason (or non-occurrence of the event
             described in clause (v) of this definition) or (ii) unless Executive shall have

Source: DEAN FOODS CO, 10-K, March 16, 2005
             delivered a written notice to the Board within 60 days of his having actual
             knowledge of the occurrence of one of such events stating that he intends to
             terminate his employment for Good Reason and specifying the factual basis for
             such termination, and such event, if capable of being cured, shall not have been
             cured within 10 days of the receipt of such notice. A "TERMINATION DUE TO
             RETIREMENT" means Executive's voluntary termination of employment after having
             (i) completed at least five (5) years of service with the Company and (ii) the
             sum of the Executive's attained age and length of service with the Company is at
             least 62 (or such lower number as the Board shall permit). A "VOLUNTARY
             TERMINATION" shall mean a termination of employment by Executive that is not a
             Termination for Good Reason, a Termination due to Retirement or a Termination
             due to Disability, and which occurs after the Registration Date and on 90th day
             after Executive shall have given the Company written notice of his intent to
             terminate his employment (or as of such later date as Executive shall specify in
             such notice).

                    (e) Payments and Benefits Upon Certain Terminations.

                          (i) In the event of the termination of Executive's employment for
                    any reason (including a voluntary termination of employment by Executive
                    which is not a Termination for Good Reason), Executive shall be entitled
                    to any Earned Compensation owed to Executive but not yet paid and the
                    Vested Benefits.

                          (ii) Except as provided in Section 8(e)(iii), in the event the
                    Employment Period ends by reason of a Termination Without Cause or a
                    Termination for Good Reason, Executive shall receive the Basic Payment.

                          (iii) In the event the Employment Period ends by reason of a
                    Termination Without Cause or a Termination for Good Reason within the 24
                    month period immediately following a Change of Control, Executive shall
                    receive the Basic Payment.

                          (iv) In the event that Executive's employment terminates due to his
                    death, a Termination due to Disability, a Termination due to Retirement, a
                    Termination Without Cause or a Termination for Good Reason, in any case,
                    after the Registration Date, (x) any portion of the Option that has not
                    become vested and exercisable prior to such termination of employment
                    shall become vested and exercisable and, to the extent not earlier
                    exercised, the Option shall remain exercisable until the second
                    anniversary of such termination or, if earlier, the expiration of its
                    term, and (y) any Basic Restricted Shares and Supplemental Restricted
                    Shares outstanding on such date of termination shall continue to vest, if
                    at all, in accordance with their terms on the same terms and conditions
                    that would have applied if Executive's employment hereunder had not been
                    terminated.

                                                     10



                          (v) In the event of a Termination due to Disability, a Termination
                    Without Cause or a Termination for Good Reason, Executive shall be
                    entitled to continued participation in all medical, dental,
                    hospitalization and life insurance coverage and in other employee benefit
                    plans or programs in which he was participating on the date of the
                    termination of his employment until the earlier of (A) the third
                    anniversary of his termination of - employment and (B) the date, or dates,
                    he receives equivalent coverage and benefits - under the plans and
                    programs of a subsequent employer (such coverages and benefits to be
                    determined on a coverage-by-coverage, or benefit-by-benefit basis);
                    provided that if Executive is precluded from continuing his participation
                    in any employee plan or program as provided in this Section 8(e)(iv), he
                    shall be provided with the economic equivalent of the benefits provided
                    under the plan or program in which he is unable to participate.

                          (vi) Certain Definitions. For purposes of this Section 8,
                    capitalized terms have the following meanings.

                   "BASIC PAYMENT" means an amount equal to three times the sum of (a) the
             annual Base Salary payable to Executive immediately prior to the end of the
             Employment Period (or in the event a reduction in Base Salary is the basis for a
             Termination for Good Reason, then the Base Salary in effect immediately prior to
             such reduction) and (b) the Target Incentive Compensation for the calendar year
             in which the Employment Period ends pursuant to Section 8(a).

                   "CHANGE OF CONTROL" means the occurrence of any of the following events
             following the date of distribution of the Common Stock to the stockholders of
             Dean in connection with the Spin-Off: (a) any "person" (as such term is used in
             Section 13(d) of the Exchange Act, but specifically excluding the Company, any

Source: DEAN FOODS CO, 10-K, March 16, 2005
             wholly-owned subsidiary of the Company and/or any employee benefit plan
             maintained by the Company or any wholly-owned subsidiary of the Company) becomes
             the "beneficial owner" (as determined pursuant to Rule 13d-3 under the Exchange
             Act), directly or indirectly, of securities of the Company representing thirty
             percent (30%) or more of the combined voting power of the Company's then
             outstanding securities; or (b) individuals who currently serve on the Board, or
             whose election to the Board or nomination for election to the Board was approved
             by a vote of at least two-thirds (2/3) of the directors who either currently
             serve on the Board, or whose election or nomination for election was previously
             so approved, cease for any reason to constitute a majority of the Board; or (c)
             the Company or any subsidiary of the Company shall merge with or consolidate
             into any other corporation, other than a merger or consolidation which would
             result in the holders of the voting securities of the Company outstanding
             immediately prior thereto holding immediately thereafter securities representing
             more than sixty percent (60%) of the combined voting power of the voting
             securities of the Company or such surviving entity (or its ultimate parent, if
             applicable) outstanding immediately after such merger or consolidation; or (d)
             the stockholders of the Company approve a plan of complete

                                                    11



             liquidation of the Company or an agreement for the sale or disposition by the
             Company of all or substantially all of the Company's assets, or such a plan is
             commenced.

                   "DATE OF TERMINATION" means (i) if Executive's employment is terminated by
             his death, the date of his death, and (ii) if Executive's employment is
             terminated for any other reason, the date specified in a notice of termination
             delivered to Executive by the Company (or if no such date is specified, the date
             such notice is delivered).

                   "EARNED COMPENSATION" means the sum of (a) any Base Salary earned, but
             unpaid, for services rendered to the Company on or prior to the date on which
             the Employment Period ends pursuant to Section 8(a), (b) any annual Incentive
             Compensation payable for services rendered in the calendar year preceding the
             calendar year in which the Employment Period ends that has not been paid on or
             prior to the date the Employment Period ends (other than (x) Base Salary and (y)
             Incentive Compensation deferred pursuant to Executive's election), (c) any
             accrued but unused vacation days and (d) any business expenses incurred on or
             prior to the date of the Executive's termination that are eligible for
             reimbursement in accordance with the Company's expense reimbursement policies as
             then in effect.

                   "TARGET INCENTIVE COMPENSATION" means with respect to any calendar year
             the annual Incentive Compensation Executive would have been entitled to receive
             under Section 4(b) for such calendar year had he remained employed by the
             Company for the entire calendar year and assuming that all targets for such
             calendar year had been met.

                   "VESTED BENEFITS" means amounts which are vested or which Executive is
             otherwise entitled to receive under the terms of or in accordance with any plan,
             policy, practice or program of, or any contract or agreement with, the Company
             or any of its subsidiaries, at or subsequent to the date of his termination
             without regard to the performance by Executive of further services or the
             resolution of a contingency.

                   (f) Resignation upon Termination. Effective as of any Date of Termination
             under this Section 8, Executive shall resign, in writing, from all positions
             then held by him with the Company and its affiliates.

                   (g) Timing of Payments. Earned Compensation and the Basic Payment shall be
             paid in a single lump sum as soon as practicable, but in no event more than 15
             days, following the end of the Employment Period. Vested Benefits shall be
             payable in accordance with the terms of the plan, policy, practice, program,
             contract or agreement under which such benefits have accrued.

                   (h) Payment Following a Change of Control. If the aggregate of all
             payments or benefits made or provided to Executive with respect to any of the
             equity compensation provided under Section 5 or Section 6, under Section
             8(e)(iii)(A), if applicable, and under all other plans and programs of the
             Company (the "AGGREGATE PAYMENT") is determined to constitute a Parachute
             Payment, as such term is defined in Section 280G(b)(2) of the

                                                    12



             Code, the Company shall pay to Executive, prior to the time any excise tax

Source: DEAN FOODS CO, 10-K, March 16, 2005
             imposed by Section 4999 of the Code (the "EXCISE TAX") is payable with respect
             to such Aggregate Payment, an additional amount which, after the imposition of
             all income, employment and excise taxes thereon, is equal to the Excise Tax on
             the Aggregate Payment. The determination of whether the Aggregate Payment
             constitutes a Parachute Payment and, if so, the amount to be paid to Executive
             and the time of payment pursuant to this Section 8(h) shall be made by the
             Company's independent auditor or, if such independent auditor is unwilling or
             unable to serve in this capacity, such other nationally recognized accounting
             firm selected by the Company with the consent of the person serving as the Chief
             Executive Officer of the Company immediately prior to the Change of Control,
             which consent shall not be unreasonably withheld (the "AUDITOR").

                   (i) Full Discharge of Company Obligations. The amounts payable to
             Executive pursuant to this Section 8 following termination of his employment
             (including amounts payable with respect to Vested Benefits) shall be in full and
             complete satisfaction of Executive's rights under this Agreement and any other
             claims he may have in respect of his employment by the Company or any of its
             subsidiaries other than claims for common law torts or under other contracts
             between Executive and the Company or its subsidiaries. Such amounts shall
             constitute liquidated damages with respect to any and all such rights and claims
             and, upon Executive's receipt of such amounts, the Company shall be released and
             discharged from any and all liability to Executive in connection with this
             Agreement or otherwise in connection with Executive's employment with the
             Company and its subsidiaries and, as a condition to payment of any such amounts
             that are in excess of the Earned Compensation and the Vested Benefits, following
             the Date of Termination and if requested by the Company, Executive shall execute
             a release in favor of the Company in the form approved by the Company.

                   (j) No Mitigation; No Offset. In the event of any termination of
             employment under this Section 8, Executive shall be under no obligation to seek
             other employment and there shall be no offset against amounts due Executive
             under this Agreement on account of any remuneration attributable to any
             subsequent employment that he may obtain except as specifically provided with
             regard to the continuation of benefits in Section 8(e)(v).

                9. Noncompetition and Confidentiality.

                   (a) Noncompetition. During the Employment Period and, in the event that
             Executive's employment is terminated for any reason other than death, a
             Termination Without Cause or a Termination for Good Reason, for a period of 12
             months following the Date of Termination (the "POST-TERMINATION PERIOD"),
             Executive shall not become associated with any entity, whether as a principal,
             partner, employee, consultant or shareholder (other than as a holder of not in
             excess of 1% of the outstanding voting shares of any publicly traded company),
             that is actively engaged in any geographic area in any business which is in
             competition with a business conducted by the Company at the

                                                    13



             time of the alleged competition and, in the case of the Post-Termination Period,
             at the Date of Termination.

                   (b) Confidentiality. Without the prior written consent of the Company,
             except (i) in the course of carrying out his duties hereunder or (ii) to the
             extent required by an order of a court having competent jurisdiction or under
             subpoena from an appropriate government agency, Executive shall not disclose any
             trade secrets, customer lists, drawings, designs, information regarding product
             development, marketing plans, sales plans, manufacturing plans, management
             organization information (including data and other information relating to
             members of the Board and management), operating policies or manuals, business
             plans, financial records, packaging design or other financial, commercial,
             business or technical information relating to the Company or any of its
             subsidiaries or information designated as confidential or proprietary that the
             Company or any of its subsidiaries may receive belonging to suppliers, customers
             or others who do business with the Company or any of its subsidiaries
             (collectively, "CONFIDENTIAL INFORMATION") to any third person unless such
             Confidential Information has been previously disclosed to the public by the
             Company or has otherwise become available to the public (other than by reason of
             Executive's breach of this Section 9(b)).

                   (c) Company Property. Promptly following termination of Executive's
             employment, Executive shall return to the Company all property of the Company,
             and all copies thereof in Executive's possession or under his control, except
             that Executive may retain his personal notes, diaries, Rolodexes, calendars and
             correspondence.

                   (d) Non-Solicitation of Employees. During the Employment Period and during
             the one year period following any termination of Executive's employment for any

Source: DEAN FOODS CO, 10-K, March 16, 2005
             reason, Executive shall not, except in the course of carrying out his duties
             hereunder, directly or indirectly induce any employee of the Company or any of
             its subsidiaries to terminate employment with such entity, and shall not
             directly or indirectly, either individually or as owner, agent, employee,
             consultant or otherwise, knowingly employ or offer employment to any person who
             is or was employed by the Company or a subsidiary thereof unless such person
             shall have ceased to be employed by such entity for a period of at least 6
             months.

                   (e) Injunctive Relief with Respect to Covenants. Executive acknowledges
             and agrees that the covenants and obligations of Executive with respect to
             noncompetition, nonsolicitation, confidentiality and Company property relate to
             special, unique and extraordinary matters and that a violation of any of the
             terms of such covenants and obligations may cause the Company irreparable injury
             for which adequate remedies are not available at law. Therefore, Executive
             agrees that the Company shall be entitled to an injunction, restraining order or
             such other equitable relief restraining Executive from committing any violation
             of the covenants and obligations contained in this Section 9. These injunctive
             remedies are cumulative and are in addition to any other rights and remedies the
             Company may have at law or in equity.

                                                    14



                10. Miscellaneous.

                   (a) Survival. Sections 7(d) (relating to the Company's obligation to
             indemnify Executive), 8 (relating to early termination), 9 (relating to
             noncompetition, nonsolicitation and confidentiality) and 10(o) (relating to
             governing law) shall survive the termination hereof, whether such termination
             shall be by expiration of the Employment Period or an early termination pursuant
             to Section 8 hereof.

                   (b) Binding Effect. This Agreement shall be binding on, and shall inure to
             the benefit of, the Company and any person or entity that succeeds to the
             interest of the Company (regardless of whether such succession does or does not
             occur by operation of law) by reason of a merger, consolidation or
             reorganization involving the Company or a sale of all or substantially all of
             the assets of the Company, provided that the assignee or transferee is the
             successor to all or substantially all of the assets of the Company and such
             assignee or transferee assumes the liabilities, obligations and duties of the
             Company, as contained in this Agreement, either contractually or as a matter of
             law. The Company further agrees that, in the event of a sale of assets as
             described in the preceding sentence, it shall use its reasonable best efforts to
             cause such assignee or transferee to expressly assume the liabilities,
             obligations and duties of the Company hereunder. This Agreement shall also inure
             to the benefit of Executive's heirs, executors, administrators and legal
             representatives and beneficiaries as provided in Section 10(d).

                    (c) Assignment. Except as provided under Section 10(b), neither this
             Agreement nor any of the rights or obligations hereunder shall be assigned or
             delegated by any party hereto without the prior written consent of the other
             party.

                   (d) Beneficiaries/References. Executive shall be entitled, to the extent
             permitted under any applicable law and the terms of any applicable plan, to
             select and change a beneficiary or beneficiaries to receive any compensation or
             benefit payable hereunder following Executive's death by giving the Company
             written notice thereof. In the event of Executive's death or a judicial
             determination of his incompetence, reference in this Agreement to Executive
             shall be deemed, where appropriate, to refer to his beneficiary, estate or other
             legal representative.

                   (e) Resolution of Disputes. Any disputes arising under or in connection
             with this Agreement shall, at the election of Executive or the Company, be
             resolved by binding arbitration, to be held in Chicago, Illinois in accordance
             with the rules and procedures of the American Arbitration Association. Judgment
             upon the award rendered by the arbitrator(s) may be entered in any court having
             jurisdiction thereof. Costs of the arbitration shall be borne by the Company.
             Unless the arbitrator determines that Executive did not have a reasonable basis
             for asserting his position with respect to the dispute in question, the Company
             shall also reimburse Executive for his reasonable attorneys' fees incurred with
             respect to any arbitration. Pending the resolution of any arbitration or court
             proceeding, the Company shall continue payment of all amounts due

                                                    15




Source: DEAN FOODS CO, 10-K, March 16, 2005
             Executive under this Agreement and all benefits to which Executive is entitled
             at the time the dispute arises (other than the amounts which are the subject of
             such dispute).

                   (f) Entire Agreement. This Agreement constitutes the entire agreement
             between the parties hereto with respect to the matters referred to herein. No
             amendment to this Agreement shall be binding between the parties unless it is in
             writing and signed by the party against whom enforcement is sought. There are no
             promises, representations, inducements or statements between the parties other
             than those that are expressly contained herein. Executive acknowledges that he
             is entering into this Agreement of his own free will and accord, and with no
             duress, that he has been represented and fully advised by competent counsel in
             entering into this Agreement, that he has read this Agreement and that he
             understands it and its legal consequences.

                   (g) Representations. Executive represents that his employment hereunder
             and compliance by him with the terms and conditions of this Agreement will not
             conflict with or result in the breach of any agreement to which he is a party or
             by which he may be bound. The Company is a corporation duly organized, validly
             existing and in good standing under the laws of the State of Delaware. The
             Company has the full corporate power and authority to execute and deliver this
             Agreement. The Company has taken all action required by law, the Certificate of
             Incorporation, its By-Laws or otherwise required to be taken by it to authorize
             the execution, delivery and performance by it of this Agreement. This Agreement
             is a valid and binding obligation of the Company, enforceable against the
             Company in accordance with its terms.

                   (h) Severability; Reformation. In the event that one or more of the
             provisions of this Agreement shall become invalid, illegal or unenforceable in
             any respect, the validity, legality and enforceability of the remaining
             provisions contained herein shall not be affected thereby. In the event any of
             Section 9(a), (b) or (d) is not enforceable in accordance with its terms,
             Executive and the Company agree that such Section shall be reformed to make such
             Section enforceable in a manner which provides the Company the maximum rights
             permitted at law.

                   (i) Waiver. Waiver by any party hereto of any breach or default by the
             other party of any of the terms of this Agreement shall not operate as a waiver
             of any other breach or default, whether similar to or different from the breach
             or default waived. No waiver of any provision of this Agreement shall be implied
             from any course of dealing between the parties hereto or from any failure by
             either party hereto to assert its or his rights hereunder on any occasion or
             series of occasions.

                   (j) Notices. Any notice required or desired to be delivered under this
             Agreement shall be in writing and shall be delivered personally, by courier
             service, by registered mail, return receipt requested, or by telecopy and shall
             be effective upon actual receipt when delivered or sent by telecopy and upon
             mailing when sent by registered mail, and shall be addressed as follows (or to
             such other address as the party entitled to notice shall hereafter designate in
             accordance with the terms hereof):

                                                        16



                                                        17



                             If to the Company:

                                        857-897 School Place
                                        P.O. Box 19057
                                        Green Bay, Wisconsin 54307
                                        Attention: General Counsel
                                        Telecopy No.: (920) 497-4604

                                        prior to the Registration Date, with a copy to:

                                        Dean Foods Company
                                        2515 McKinney Avenue
                                        Suite 1200
                                        Dallas, Texas 75201
                                        Attention: General Counsel
                                        Telecopy No.: (214) 303-3413

                             If to Executive:

                                        622 W. Maple

Source: DEAN FOODS CO, 10-K, March 16, 2005
                                        Hinsdale, Illinois 60521

                                        with a copy to:

                                        Vedder, Price, Kaufman & Kammholz, P.C.
                                        222 N. LaSalle Street
                                        Chicago, Illinois 60601
                                        Attention: Robert J. Stucker, Esq.
                                                   Thomas P. Desmond, Esq.

                   (k) Amendments. This Agreement may not be altered, modified or amended
             except by a written instrument signed by each of the parties hereto.

                   (l) Headings. Headings to Sections in this Agreement are for the
             convenience of the parties only and are not intended to be part of or to affect
             the meaning or interpretation hereof.

                   (m) Counterparts. This Agreement may be executed in counterparts, each of
             which shall be deemed an original but all of which together shall constitute one
             and the same instrument.

                   (n) Withholding. Any payments provided for herein shall be reduced by any
             amounts required to be withheld by the Company from time to time under
             applicable federal, state or local income or employment tax laws or similar
             statutes or other provisions of law then in effect.

                                                           18



                   (o) Governing Law. This Agreement shall be governed by the laws of the
             State of Delaware, without reference to principles of conflicts or choice of law
             under which the law of any other jurisdiction would apply.

                                              -- Signature page follows --

                                                           19



                   IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
             by its duly authorized officer and Executive has hereunto set his hand as of the
             day and year first above written.

                                                           DEAN SPECIALTY FOODS
                                                               HOLDINGS, INC.

                                                             By: __________________________
                                                                 Name:
                                                                 Title:

                                                           EXECUTIVE:

                                                           ________________________________
                                                           Sam K. Reed

                                                           20



                                                                                          Schedule A

             On each of January 31, 2006, January 31, 2007 and January 31, 2008, one-third of
             the Basic Restricted Shares shall vest, provided that the Company's Total
             Shareholder Return for the period commencing on the fourth trading day following
             the Registration Date (the "COMMENCEMENT DATE") and ending on such January 31st
             equals or exceeds the median of the Total Shareholder Return for such period for
             the companies in the Selected Peer Group (as defined below).

             In addition, on each of January 31, 2007, January 31, 2008, January 31, 2009 and
             January 31, 2010, any Basic Restricted Shares that could have vested, but that
             did not vest, on any preceding January 31st shall vest on such subsequent date
             if the Company's Total Shareholder Return for the period from the Commencement
             Date through the applicable January 31st shall equal or exceed the median of the
             Total Shareholder Return for such period for the companies in the Selected Peer
             Group.

             As used herein, "TOTAL SHAREHOLDER RETURN" shall mean the percentage return
             received by all shareholders of the relevant company during the applicable
             measurement period, including stock price appreciation and dividends, and shall

Source: DEAN FOODS CO, 10-K, March 16, 2005
             be calculated as follows:

              Ending Stock Price (1) - Beginning Stock Price (2) + Dividend Reinvestment (3)
              ------------------------------------------------------------------------------
                                         Beginning Stock Price (2)

                    (1)    With respect to each of the Company and each company in the Selected
                           Peer Group, the average of the closing prices of its common stock
                           for the 20 consecutive trading day period ending on the applicable
                           January 31st (or if the applicable January 31 is not a trading date,
                           the immediately preceding trading date).

                    (2)    With respect to each of the Company and each company in the Selected
                           Peer Group, the average of the closing prices of its common stock on
                           the Registration Date and each of the four consecutive trading days
                           immediately following the Registration Date.

                    (3)    Assumes any dividends paid on the common stock of the Company or any
                           company in the Selected Peer Group are used to purchase its common
                           stock at the closing stock price on the date that such dividends are
                           payable, and includes the value of such additional shares of such
                           common stock (based on the Ending Stock Price for such common
                           stock).

             As used herein, "SELECTED PEER GROUP" shall mean 20 or more companies selected
             by the Board of Directors of the Company (or any authorized committee thereof)
             from

                                                      21



             among packaged food companies whose securities are registered to trade on a U.S.
             national securities exchange or automated quotation system (including, but not
             limited to NASDAQ) (the "PEER COMPANIES") on or as soon as practicable after the
             Registration Date; provided that in no event shall any Ineligible Company be
             selected to be a member of the Selected Peer Group. An "INELIGIBLE COMPANY"
             shall mean any Peer Company (i) in which significant portion of its voting
             securities is held by another corporate entity (other than an open-ended
             investment company); (ii) has filed for protection under the Federal bankruptcy
             law or any similar law, (iii) which is not organized, based and majority-owned
             in the United States, (iv) is party to any agreement the consummation of which
             would cause such Peer Company to cease to be publicly traded (or be described in
             subclause (i) or (iii)), or (v) which has announced an intention to be sold or
             cease to be publicly traded or to take actions which would cause it to be
             described in subclause (i) or (iii). To the extent that any Peer Company
             initially selected as part of the Selected Peer Group with respect to a
             measurement period shall become an Ineligible Company prior to the end of such
             period, such company shall be excluded from the Selected Peer Group for such
             period. The Selected Peer Group will be reviewed annually to determine whether
             any of its members shall have become Ineligible Companies.

                                                      22




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                EXHIBIT 10.14

                                              EMPLOYMENT AGREEMENT

                   EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of January 27, 2005, by
             and between Dean Specialty Foods Holdings, Inc., a Delaware corporation (the
             "COMPANY"), and David B. Vermylen (the "EXECUTIVE").

                                              W I T N E S S E T H:

                WHEREAS, the Company's parent corporation, Dean Foods Company ("DEAN"),
             intends, subject to certain conditions, to distribute the common stock, par
             value $.01 per share, of the Company (the "COMMON STOCK") owned by Dean to its
             shareholders, whereby the Company would become a stand-alone publicly traded
             corporation;

                WHEREAS, Executive is willing to enter into this Agreement in anticipation of
             the Company becoming a stand-alone publicly traded corporation through the
             distribution of the Common Stock to Dean's shareholders;

                WHEREAS, to effect such a spin-off and to position the Company to maximize
             its value for Dean's shareholders, it is necessary that the Company have a
             strong and experienced management team with a proven track record in developing
             and growing a company in the consumer packaged goods industry;

                WHEREAS, Executive is one of several members of a management team (the
             "TEAM") that possesses the skills and experience necessary to undertake the
             challenges of developing the Company, including through acquisitions;

                WHEREAS, in light of these skills and experience, the Company desires to
             secure the services of Executive and the other members of the Team, and is
             willing to enter into this Agreement embodying the terms of the employment of
             Executive by the Company, which terms include one or more substantial
             equity-based compensation awards; and

                WHEREAS, Executive is willing to accept such employment and enter into such
             Agreement, subject to Dean making available to Executive and to the other
             members of the Team the opportunity to invest in the common stock of the Company
             and making the undertakings regarding the governance and management of the
             Company set forth in the in the stockholders agreement (the "STOCKHOLDERS
             AGREEMENT") to be entered into by the Company, Dean, Executive, other members of
             the Team, and certain other investors who are affiliates of the Team
             contemporaneously with this Agreement; and

                WHEREAS, in order to give Executive and the Team the opportunity to acquire
             an equity interest in the Company and as an incentive for Executive to
             participate in the affairs of the Company, the Company is willing to sell to
             Executive, and Executive

                                                       1


             desires to purchase, shares of common stock (the "COMMON STOCK"), subject to the
             terms and conditions set forth in the Subscription Agreement (the "SUBSCRIPTION
             AGREEMENT") to be entered into contemporaneously with this Agreement and in the
             Stockholders Agreement.

                   NOW, THEREFORE, in consideration of the mutual covenants herein contained,
             the Company and Executive hereby agree as follows:

                1. Employment. Upon the terms and subject to the conditions of this Agreement
             and, unless earlier terminated as provided in Section 8, the Company hereby
             employs Executive and Executive hereby accepts employment by the Company for the
             period (i) commencing on the date hereof (the "COMMENCEMENT DATE") and (ii)
             ending on the third anniversary of (A) the Commencement Date or, (B) if the
             Common Stock shall become registered under Section 12(g) of the Securities
             Exchange Act of 1934, as amended (the "EXCHANGE ACT"), during the term hereof,
             the third anniversary of the date such registration shall have become effective
             and trading of Common Stock on a registered national securities exchange or
             automated quotation system (including, but not limited to, NASDAQ) shall have
             commenced (the "REGISTRATION DATE"); provided, however, that the term of this
             Agreement shall automatically be extended for one additional year on the third
             anniversary of the Registration Date and each subsequent anniversary thereof
             unless not less than 90 days prior to such anniversary date either party shall
             give the other written notice that he or it does not want the term to extend as
             of such anniversary date. The period during which Executive is employed pursuant
             to this Agreement (including pursuant to any extension of the term hereof

Source: DEAN FOODS CO, 10-K, March 16, 2005
             pursuant to the proviso in the immediately preceding sentence) shall be referred
             to herein as the "EMPLOYMENT PERIOD."

                2. Position and Duties. During the Employment Period, Executive shall serve
             as the President and Chief Operating Officer of the Company and in such other
             position or positions with the Company and its majority-owned subsidiaries
             consistent with the foregoing position as the Board of Directors of the Company
             (the "BOARD") may specify or the Company and Executive may mutually agree upon
             from time to time. During the Employment Period, Executive shall have the
             duties, responsibilities and obligations customarily assigned to individuals at
             comparable publicly traded companies serving in the position or positions in
             which Executive serves hereunder. Executive shall devote substantially all his
             business time to the services required of him hereunder, except for vacation
             time and reasonable periods of absence due to sickness, personal injury or other
             disability, and shall perform such services to the best of his abilities.
             Subject to the provisions of Section 9, nothing herein shall preclude Executive
             from (i) engaging in charitable activities and community affairs, (ii) managing
             his personal investments and affairs or (iii) serving on the board of directors
             or other governing body of any corporate or other business entity, so long as
             such service is not in violation of the covenants contained in Section 9 or the
             governance principles established for the Company by the Board, as in effect
             from time to time, provided that in no event may such activities, either

                                                    2


             individually or in the aggregate, materially interfere with the proper
             performance of Executive's duties and responsibilities hereunder.

                3. Place of Performance. The Company shall establish its headquarters office
             in Chicago, Illinois metropolitan area at which Executive shall have his
             principal office. Executive shall also have an office, and perform services at,
             the Company's offices in Green Bay, Wisconsin, on such basis as Executive deems
             necessary or appropriate for the performance of his duties.

                4. Compensation.

                   (a) Base Salary. During the Employment Period, the Company shall pay
             Executive a base salary at the annual rate of $500,000. Beginning in 2006, the
             Board shall review Executive's base salary no less frequently than annually and
             may increase such base salary in its discretion. The amount of annual base
             salary payable under this Section 4(a) shall be reduced, however, to the extent
             Executive elects to defer such salary under the terms of any deferred
             compensation or savings plan or arrangement maintained or established by the
             Company or any of its subsidiaries. Executive's annual base salary payable
             hereunder, including any increased annual base salary, without reduction for any
             amounts deferred as described above, is referred to herein as "BASE SALARY". The
             Company shall pay Executive the portion of his Base Salary not deferred in
             accordance with its standard payroll practices, but no less frequently than in
             equal monthly installments.

                   (b) Incentive Compensation. For each full calendar year during the
             Employment Period, Executive shall be eligible to receive an annual incentive
             bonus from the Company, with a target bonus opportunity of not less than 80% of
             his Base Salary, which will be payable, if at all, upon the achievement by
             Executive and/or the Company of performance objectives to be established by the
             Board in consultation with the Company's Chief Executive Officer and
             communicated to Executive during the first quarter of such year (the "INCENTIVE
             COMPENSATION"). Without limiting the generality of the foregoing, the actual
             amount payable to Executive in respect of the Incentive Compensation may be more
             or less than the targeted opportunity (including zero) based on the actual
             results against the pre-established performance objectives.

                5. Stock Purchase. Substantially contemporaneously with the Commencement
             Date, Executive shall purchase the number of shares of Common Stock of the
             Company specified in the Subscription Agreement related to the purchase of such
             shares, to be entered into by Executive and the Company (the "SUBSCRIPTION
             AGREEMENT"). The terms and conditions of such purchase shall be as set forth in
             the Subscription Agreement, and such shares shall be subject to the limitations
             and restrictions, including, without limitation, the restrictions on transfer
             and the put and call rights set forth in the Stockholders Agreement.

                                                    3


                6. Public Equity Awards.

                   (a) Basic Restricted Stock Grant. On the fourth trading day following the
             Registration Date, the Company shall grant Executive an award of that number of
             whole restricted shares of Common Stock (the "BASIC RESTRICTED SHARES") as is

Source: DEAN FOODS CO, 10-K, March 16, 2005
             equal to (or most closely approximates) 0.44% of the Outstanding Common Stock on
             the date of grant. The Basic Restricted Shares shall vest and become freely
             transferable in the proportions, and based upon achievement of the total
             shareholder return objectives, determined pursuant to Schedule A hereto, so long
             as Executive is continuously employed by the Company through the applicable
             vesting date. Any Basic Restricted Shares that have not become vested and freely
             transferable on or before the fifth anniversary of the grant date shall be
             forfeited. For purposes of this Agreement, "OUTSTANDING COMMON STOCK" shall mean
             the sum of (x) the number of shares Common Stock that are issued and outstanding
             on the Registration Date and (y) the number of shares of Common Stock issuable
             pursuant to any stock options granted by Dean prior to the Registration Date in
             respect of its common stock and converted into the right to purchase Common
             Stock in connection with or in contemplation of the Spin-Off.

                   (b) Supplemental Restricted Stock Unit Grant. On the fourth trading day
             following the Registration Date, Executive shall be granted, automatically and
             without any further action on the part of the Company or the Board, an award of
             restricted stock units, with each such unit representing a right to receive one
             share of Common Stock on the terms and conditions set forth herein (the
             "SUPPLEMENTAL RESTRICTED SHARE UNITS"). The number of Supplemental Restricted
             Share Units subject to such grant shall be equal to the quotient (rounded up to
             the nearest whole number) obtained by dividing (x) by (y), where (x) and (y)
             are:

                    (x)    the product of (i) the excess, if any, of (A) the Initial Fair
                           Market Value over (B) the Adjusted Per Share Purchase Price and (ii)
                           that number of whole shares of Common Stock as is equal to (or most
                           closely approximates) 1.32% of the Outstanding Common Stock on the
                           date of grant; and

                    (y)    the Initial Fair Market Value.

                For purposes of this Agreement, "INITIAL FAIR MARKET VALUE" shall mean the
             average of the closing values on the Registration Date and on each of the next
             four trading days immediately following the Registration Date, as reported on
             the principal exchange or automated quotation system on which the Common Stock
             is traded or reported. "ADJUSTED PER SHARE PURCHASE PRICE" shall mean the $5,000
             purchase price per share of Common Stock, appropriately adjusted to reflect any
             stock split or share combination involving the Common Stock, any
             recapitalization of the Company, any adjustment pursuant to Section 4.3(b) of
             the Stockholders Agreement, or any merger, consolidation, reorganization or
             similar corporate event involving the Company occurring

                                                      4


             on or after the Commencement Date and on or before the Registration Date.

                The Supplemental Restricted Share Units shall vest in three equal annual
             installments on the first three anniversaries of the Registration Date, so long
             as (with respect to each installment) Executive is continuously employed by the
             Company through the applicable anniversary date. Notwithstanding the foregoing,
             no Supplemental Restricted Share Units shall become vested on any such
             anniversary date if, on such date, the average of the closing prices of a share
             of Common Stock on the principal trading market on which such shares are traded
             or reported for the 20 trading day period ended on such date (or, if such date
             is not a business day, the 20 trading day period ended on the last trading day
             occurring immediately prior thereto) does not exceed the Initial Fair Market
             Value (the "MINIMUM VALUE REQUIREMENT"). In the event that the Minimum Value
             Requirement is not satisfied on any applicable anniversary date, the
             Supplemental Restricted Share Units that would otherwise have vested on such
             anniversary date shall vest on any subsequent anniversary date or on any date
             after the third anniversary date (treating each such date as an anniversary date
             for purposes of the 20 day trading measurement period) on which both Executive
             is still an employee of the Company and the Minimum Value Requirement is
             satisfied; provided that any such Supplemental Restricted Share Units that have
             not become vested on or before the fifth anniversary of the grant date shall be
             forfeited. The shares of Common Stock corresponding to any vested Supplemental
             Restricted Share Units, if any, shall be distributed to Executive as soon as
             practicable, but not later than five (5) business days following the earlier to
             occur of (i) the fifth anniversary of the date of grant or (ii) the sixth month
             anniversary of the date Executive's employment with the Company terminates,
             unless the Executive elects (in a manner consistent with the applicable
             requirements of Section 409A of the Internal Revenue Code (the "CODE")) to defer
             the date upon which the shares of Common Stock corresponding to the vested
             Supplement Restricted Share Units shall be distributed.

                   (c) Stock Option. On the fourth trading day following the Registration
             Date, the Company shall automatically and without any further action on the part
             of the Company or the Board grant to Executive a non-qualified stock option to

Source: DEAN FOODS CO, 10-K, March 16, 2005
             purchase the number of shares of Common Stock equal to the remainder of (i) the
             number of whole shares of Common Stock specified in Section 6(b)(x)(ii) minus
             (ii) the number of Supplemental Restricted Share Units awarded pursuant to
             Section 6(b) (the "OPTION"). The exercise price per share with respect to the
             Option shall be equal to the Initial Fair Market Value. The Option shall become
             vested and exercisable in three approximately equal annual installments on each
             of the first three anniversaries of the grant date of such Option, so long as
             Executive is continuously employed by the Company through the applicable
             anniversary date.

                   (d) Stock Incentive Plan. Each of the Basic Restricted Shares, the
             Supplemental Restricted Shares and the Option shall be granted pursuant to a
             stock incentive plan (the "INCENTIVE PLAN") to be adopted by the Company prior
             to the Registration Date that will authorize for issuance thereunder at least
             (i) 13% of the

                                                    5


             Outstanding Common Stock plus (ii) the number of shares of Common Stock issuable
             pursuant to any stock options granted by Dean prior to the Registration Date in
             respect of its common stock and converted into the right to purchase Common
             Stock in connection with or in contemplation of the Spin-Off as provided in the
             Stockholders Agreement. Such Incentive Plan shall have terms and conditions
             which will permit the issuance of the awards to the Executive specified in this
             Section 6 and shall not contain any other term or condition that has an adverse
             effect on any award to be made to Executive pursuant to this Section 6.

                   (e) Award Agreements. Each of the Basic Restricted Shares, Supplemental
             Restricted Shares and the Option shall be subject to an award agreement having
             the terms and conditions specified in the preceding subparagraphs of this
             Section 6 and otherwise consistent with the terms and conditions of the
             Incentive Plan. Each such agreement shall provide for full vesting of such
             awards upon a Change of Control and shall provide that Executive shall have the
             right to elect that any applicable tax withholding requirements with respect to
             the vesting, exercise or distribution of Common Stock be satisfied by having the
             Company withhold shares of Common Stock subject to such award having a value
             equal to the minimum required applicable tax withholding, and that Executive may
             exercise the Option using previously owned shares of Common Stock, including
             Basic Restricted Shares that are still subject to forfeiture, provided that that
             number of shares deliverable upon exercise of the Option that corresponds to the
             number of unvested Basic Restricted Shares surrendered will be subject to the
             same forfeiture provisions and restrictions on transfer as the Basic Restricted
             Shares surrendered to exercise such Option, in whole or in part.

                   (f) Capital Adjustments. Notwithstanding anything to the contrary
             contained in Section 5 or this Section 6, the exercise price of, and the number
             of Shares subject to, the Option, the number of Units subject to the
             Supplemental Restricted Share Units, and the Minimum Value Requirement shall be
             appropriately adjusted, by the Board in its sole discretion, to reflect any
             extraordinary dividend, any dividend payable in shares of capital stock, any
             stock split or share combination involving the Common Stock, any
             recapitalization of the Company, any merger, consolidation, reorganization or
             similar corporate event involving the Company occurring after the Registration
             Date.

                   (g) Impact on Future Grants. Unless following the Registration Date the
             Board shall determine that special circumstances warrant the grant of such
             additional awards as it or any duly authorized committee thereof shall, in its
             sole discretion, determine, it is the intent and expectation of the parties that
             Executive will not receive any further grants of equity-based compensation prior
             to the third anniversary of the Commencement Date. Following such third
             anniversary, Executive shall be eligible to receive equity-based compensation
             awards in accordance the Company's generally applicable compensation practices,
             as then in effect.

                                                    6


                7. Benefits, Perquisites and Expenses.

                   (a) Benefits. During the Employment Period, Executive shall be eligible to
             participate in (i) each welfare benefit plan sponsored or maintained by the
             Company for its senior executive officers, including, without limitation, each
             group life, hospitalization, medical, dental, health, accident or disability
             insurance or similar plan or program of the Company, and (ii) each pension,
             profit sharing, retirement, deferred compensation or savings plan sponsored or
             maintained by the Company for its senior executive officers, in each case,
             whether now existing or established hereafter, in accordance with the generally
             applicable provisions thereof, as the same may be amended from time to time.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                   (b) Perquisites. During the Employment Period, Executive shall be entitled
             to receive such perquisites as are generally provided to other senior executive
             officers of the Company in accordance with the then current policies and
             practices of the Company.

                   (c) Business Expenses. During the Employment Period, the Company shall pay
             or reimburse Executive for all reasonable expenses incurred or paid by Executive
             in the performance of Executive's duties hereunder, upon presentation of expense
             statements or vouchers and such other information as the Company may require and
             in accordance with the generally applicable policies and procedures of the
             Company.

                   (d) Indemnification. The Company agrees that if Executive is made a party,
             or is threatened to be made a party, to any action, suit or proceeding, whether
             civil, criminal, administrative or investigative (a "PROCEEDING"), by reason of
             the fact that he is or was a director, officer or employee of the Company or any
             subsidiary or affiliate thereof, or is or was serving at the request of the
             Company as a director, officer, member, employee or agent of another
             corporation, partnership, joint venture, trust or other enterprise, including,
             in each case, service with respect to employee benefit plans, whether or not the
             basis of such Proceeding is Executive's alleged action in an official capacity
             while serving as a director, officer, member, employee or agent, Executive shall
             be indemnified and held harmless by the Company to the fullest extent legally
             permitted or authorized by the Company's certificate of incorporation or by-laws
             or resolutions of the Board or, if greater, by the laws of the State of
             Delaware, against all cost, expense, liability and loss (including, without
             limitation, attorney's fees, judgments, fines or penalties and amounts paid or
             to be paid in settlement) reasonably incurred or suffered by Executive in
             connection therewith, and such indemnification shall continue as to Executive
             even if he has ceased to be a director, officer, member, employee or agent of
             the Company or other entity and shall inure to the benefit of Executive's heirs,
             executors and administrators. If Executive serves as a director, officer,
             member, partner, employee or agent of another corporation, partnership, joint
             venture, limited liability company, trust or other enterprise (including, in
             each case, service with respect to employee benefit plans) which is a subsidiary
             or affiliate of the Company, it shall be presumed for purposes of this Section
             7(d) that Executive serves or served in such capacity at the request of the

                                                    7


             Company. The Company shall advance to Executive all reasonable costs and
             expenses incurred by him in connection with a Proceeding within 30 days after
             receipt by the Company of a written request for such advance. Such request shall
             include an undertaking by Executive to repay the amount of such advance, if it
             shall ultimately be determined that he is not entitled to be indemnified against
             such costs and expenses. The Company agrees to continue and maintain a
             directors' and officers' liability insurance policy covering Executive to the
             extent the Company provides such coverage for its other executive officers or
             directors.

                8. Termination of Employment.

                   (a) Early Termination of the Employment Period. Notwithstanding Section 1,
             the Employment Period shall end upon the earliest to occur of (i) a termination
             of Executive's employment on account of Executive's death, (ii) a Termination
             due to Disability, (iii) a Termination for Cause, (iv) a Termination Without
             Cause, (v) a Termination for Good Reason, (vi) a Termination due to Retirement
             or (vii) a Voluntary Termination.

                   (b) Termination Due to Death or Disability. In the event that Executive's
             employment hereunder terminates due to his death or as a result of a Termination
             due to Disability (as defined below), no termination benefits shall be payable
             to or in respect of Executive except as provided in Section 8(e). For purposes
             of this Agreement, "TERMINATION DUE TO DISABILITY" means a termination of
             Executive's employment upon written notice from the Company because Executive
             has been incapable, regardless of any reasonable accommodation by the Company,
             of substantially fulfilling the positions, duties, responsibilities and
             obligations set forth in this Agreement because of physical, mental or emotional
             incapacity resulting from injury, sickness or disease for a period of more than
             (i) four consecutive months or (ii) an aggregate of six months in any twelve
             month period. Any question as to the existence or extent of Executive's
             disability upon which Executive and the Company cannot agree shall be determined
             by a qualified, independent physician jointly selected by the Company and
             Executive. If the Company and Executive cannot agree on the physician to make
             the determination, then the Company and Executive shall each select a physician
             and those physicians shall jointly select a third physician, who shall make the
             determination. The determination of any such physician shall be final and
             conclusive for all purposes of this Agreement. Executive or his legal

Source: DEAN FOODS CO, 10-K, March 16, 2005
             representative or any adult member of his immediate family shall have the right
             to present to such physician such information and arguments as to Executive's
             disability as he, she or they deem appropriate, including the opinion of
             Executive's personal physician.

                   (c) Termination by the Company. The Company may terminate Executive's
             employment with the Company with or without Cause; provided that prior to the
             Registration Date, the Company may only terminate Executive's employment
             hereunder for Cause. "TERMINATION FOR CAUSE" means a termination of Executive's
             employment

                                                    8


             by the Company due to Cause. "CAUSE" means (i) Executive's conviction of a
             felony or the entering by Executive of a plea of nolo contendere to a felony
             charge, (ii) Executive's gross neglect or willful and intentional gross
             misconduct in the performance of, or willful, substantial and continual refusal
             by Executive in breach of this Agreement to perform, the duties,
             responsibilities or obligations assigned to Executive pursuant to the terms
             hereof, (iii) a TreeHouse Default (as defined in the Stockholders Agreement),
             (iv) any material breach by Executive of Section 9 of this Agreement or (v) a
             material breach by Executive of the Code of Ethics applicable to the Company's
             employees, as in effect from time to time; provided, however, that no act or
             omission shall constitute "Cause" for purposes of this Agreement unless the
             Board provides Executive, within 90 days of the Board learning of such act or
             acts or failure or failures to act, (A) written notice of the intention to
             terminate him for Cause, which notice states in detail clearly and fully the
             particular act or acts or failure or failures to act that constitute the grounds
             on which the Board reasonably believes in good faith constitutes "Cause", and
             (B) an opportunity, within thirty (30) days following Executive's receipt of
             such notice, to meet in person with the Board to explain or defend the alleged
             act or acts or failure or failures to act relied upon by the Board and, to the
             extent such cure is possible, to cure such act or acts or failure or failures to
             act. If such conduct is cured to the reasonable satisfaction of the Board, such
             notice of termination shall be revoked. Further, no act or acts or failure or
             failures to act shall be considered "willful" or "intentional" if taken in good
             faith and Executive reasonably believed such act or acts or failure or failures
             to act were in the best interests of the Company.

                   (d) Termination by Executive. Executive may terminate his employment with
             the Company for Good Reason, for Retirement or in a Voluntary Termination. A
             "TERMINATION FOR GOOD REASON" by Executive means a termination of Executive's
             employment by Executive within 90 days following (i) a reduction in Executive's
             annual Base Salary or target Incentive Compensation opportunity, (ii) the
             failure to elect or reelect Executive to any of the positions described in
             Section 2 above or the removal of him from any such position, (iii) a material
             reduction in Executive's duties and responsibilities or the assignment to
             Executive of duties and responsibilities which are materially inconsistent with
             his duties or which materially impair Executive's ability to function in the
             position specified in Section 2, (iv) a material breach of any material
             provision of this Agreement by the Company, (v) the earlier of (x) October 31,
             2005 (or such later date as the Company and Executive (or Executive's agent
             appointed pursuant to the Stockholders Agreement) shall agree) and (y) the Early
             Termination Date (as defined in the Stockholders Agreement), if the Registration
             Date has not occurred on or before such earlier date other than as a result of a
             TreeHouse Default; (vi) any material breach by the Company or Dean of the
             Stockholders Agreement; (vii) any material breach by the Company of any of the
             award agreements referenced in Section 6(e); or (viii) the failure by the
             Company to obtain the assumption agreement referred to in Section 10(b) of this
             Agreement prior to the effectiveness of any succession referred to therein,
             unless the purchaser, successor or assignee referred to therein is bound to
             perform this Agreement by operation of law. Notwithstanding the foregoing, a

                                                    9


             termination shall not be treated as a Termination for Good Reason (i) if
             Executive shall have consented in writing to the occurrence of the event giving
             rise to the claim of Termination for Good Reason (or non-occurrence of the event
             described in clause (v) of this definition) or (ii) unless Executive shall have
             delivered a written notice to the Board within 60 days of his having actual
             knowledge of the occurrence of one of such events stating that he intends to
             terminate his employment for Good Reason and specifying the factual basis for
             such termination, and such event, if capable of being cured, shall not have been
             cured within 10 days of the receipt of such notice. A "TERMINATION DUE TO
             RETIREMENT" means Executive's voluntary termination of employment after having
             (i) completed at least five (5) years of service with the Company and (ii) the
             sum of the Executive's attained age and length of service with the Company is at
             least 62 (or such lower number as the Board shall permit). A "VOLUNTARY

Source: DEAN FOODS CO, 10-K, March 16, 2005
             TERMINATION" shall mean a termination of employment by Executive that is not a
             Termination for Good Reason, a Termination due to Retirement or a Termination
             due to Disability, and which occurs after the Registration Date and on 90th day
             after Executive shall have given the Company written notice of his intent to
             terminate his employment (or as of such later date as Executive shall specify in
             such notice).

                    (e) Payments and Benefits Upon Certain Terminations.

                      (i) In the event of the termination of Executive's employment for any
                reason (including a voluntary termination of employment by Executive which is
                not a Termination for Good Reason), Executive shall be entitled to any Earned
                Compensation owed to Executive but not yet paid and the Vested Benefits.

                      (ii) Except as provided in Section 8(e)(iii), in the event the
                Employment Period ends by reason of a Termination Without Cause or a
                Termination for Good Reason, Executive shall receive the Basic Payment.

                      (iii) In lieu of the Basic Payment, in the event the Employment Period
                ends by reason of a Termination Without Cause or a Termination for Good
                Reason within the 24 month period immediately following a Change of Control,
                Executive shall receive the Special Payment.

                      (iv) In the event that Executive's employment terminates (A) due to his
                death, a Termination due to Disability or a Termination due to Retirement, in
                any such case, after the Registration Date, or (B) due to a Termination
                Without Cause or a Termination for Good Reason, in either case, after the
                Registration Date and at a time at which Sam Reed is not acting in the
                capacity of the Company's Chief Executive Officer, (x) any portion of the
                Option that has not become vested and exercisable prior to such termination
                of employment shall become vested and exercisable and, to the extent not
                earlier exercised, the Option shall remain exercisable until the second
                anniversary of such termination or, if earlier, the expiration of its term,
                and (y) any Basic Restricted Shares and Supplemental Restricted Shares
                outstanding on such date of termination shall continue to vest, if at

                                                     10


                all, in accordance with their terms on the same terms and conditions that
                would have applied if Executive's employment hereunder had not been
                terminated.

                      (v) In the event that Executive's employment terminates due to a
                Termination Without Cause or a Termination for Good Reason, in either case,
                after the Registration Date and while Sam Reed is acting in the capacity of
                the Company's Chief Executive Officer, (A) in addition to any portion of the
                Option that at such time is vested and exercisable in the ordinary course,
                upon such termination, the following additional portion of the Option shall
                become vested and exercisable: (x) the portion of the Option, if any, that
                would have become vested and exercisable on the next following anniversary of
                the Option grant date had Executive continued to have been employed plus (y)
                the portion of the Option, if any, that would become vested on the second
                following anniversary of the Option grant date had Executive continued to
                have been employed times a fraction (the "PRO-RATION FRACTION"), the
                numerator of which is the number of days Executive was employed since the
                last anniversary of such grant date through (and including) the termination
                date and the denominator of which is 365, and (B) any portion of the Option
                that is vested and exercisable on the termination date (including the portion
                thereof that vests and becomes exercisable on such date pursuant to subclause
                (A)) shall be and remain exercisable (unless earlier exercised) until the
                second anniversary of the termination date.

                      (vi) In the event that Executive's employment terminates due to a
                Termination Without Cause or a Termination for Good Reason, in either case,
                after the Registration Date and while Sam Reed is acting in the capacity of
                the Company's Chief Executive Officer, in addition to any portion thereof
                that became vested in the ordinary course prior to the date of such
                termination, the following additional portion of the Basic Restricted Shares
                and Supplemental Restricted Share Units may continue to vest in accordance
                with its terms on the same basis as would have applied had Executive's
                employment not terminated: (x) any portion of the Basic Restricted Share
                award and the Supplemental Restricted Share Units award that had not become
                vested as of the termination date solely because the performance criteria
                applicable thereto had not yet been satisfied (i.e., any portion thereof as
                to which the service requirements has been satisfied at the date Executive's
                employment terminated), (y) the portion of each such award that could become
                vested on the next following anniversary of the date on which it was granted
                had Executive continued to have been employed and (z) the portion of each
                such award, if any, that could become vested on the second following

Source: DEAN FOODS CO, 10-K, March 16, 2005
                anniversary of the grant date of such award had Executive continued to have
                been employed, multiplied by the Pro-Ration Fraction.

                      (vii) In the event of a Termination due to Disability, a Termination
                Without Cause or a Termination for Good Reason, Executive shall be entitled
                to continued participation in all medical, dental, hospitalization and life
                insurance

                                                    11


                coverage and in other employee benefit plans or programs in which
                he was participating on the date of the termination of his employment until
                the earlier of (A) the second anniversary (or, in the event Executive
                receives the Special Payment, the third anniversary) of his termination of
                employment and (B) the date, or dates, he receives equivalent coverage and
                benefits under the plans and programs of a subsequent employer (such
                coverages and benefits to be determined on a coverage-by-coverage, or
                benefit-by-benefit basis); provided that if Executive is precluded from
                continuing his participation in any employee plan or program as provided in
                this Section 8(e)(iv), he shall be provided with the economic equivalent of
                the benefits provided under the plan or program in which he is unable to
                participate.

                      (viii) Certain Definitions. For purposes of this Section 8, capitalized
                terms have the following meanings.

                   "BASIC PAYMENT" means an amount equal to two times the sum of (a) the
             annual Base Salary payable to Executive immediately prior to the end of the
             Employment Period (or in the event a reduction in Base Salary is the basis for a
             Termination for Good Reason, then the Base Salary in effect immediately prior to
             such reduction) and (b) the Target Incentive Compensation for the calendar year
             in which the Employment Period ends pursuant to Section 8(a).

                   "CHANGE OF CONTROL" means the occurrence of any of the following events
             following the date of distribution of the Common Stock to the stockholders of
             Dean in connection with the Spin-Off: (a) any "person" (as such term is used in
             Section 13(d) of the Exchange Act, but specifically excluding the Company, any
             wholly-owned subsidiary of the Company and/or any employee benefit plan
             maintained by the Company or any wholly-owned subsidiary of the Company) becomes
             the "beneficial owner" (as determined pursuant to Rule 13d-3 under the Exchange
             Act), directly or indirectly, of securities of the Company representing thirty
             percent (30%) or more of the combined voting power of the Company's then
             outstanding securities; or (b) individuals who currently serve on the Board, or
             whose election to the Board or nomination for election to the Board was approved
             by a vote of at least two-thirds (2/3) of the directors who either currently
             serve on the Board, or whose election or nomination for election was previously
             so approved, cease for any reason to constitute a majority of the Board; or (c)
             the Company or any subsidiary of the Company shall merge with or consolidate
             into any other corporation, other than a merger or consolidation which would
             result in the holders of the voting securities of the Company outstanding
             immediately prior thereto holding immediately thereafter securities representing
             more than sixty percent (60%) of the combined voting power of the voting
             securities of the Company or such surviving entity (or its ultimate parent, if
             applicable) outstanding immediately after such merger or consolidation; or (d)
             the stockholders of the Company approve a plan of complete liquidation of the
             Company or an agreement for the sale or disposition by the Company of all or
             substantially all of the Company's assets, or such a plan is commenced.

                                                    12


                   "DATE OF TERMINATION" means (i) if Executive's employment is terminated by
             his death, the date of his death, and (ii) if Executive's employment is
             terminated for any other reason, the date specified in a notice of termination
             delivered to Executive by the Company (or if no such date is specified, the date
             such notice is delivered).

                   "EARNED COMPENSATION" means the sum of (a) any Base Salary earned, but
             unpaid, for services rendered to the Company on or prior to the date on which
             the Employment Period ends pursuant to Section 8(a), (b) any annual Incentive
             Compensation payable for services rendered in the calendar year preceding the
             calendar year in which the Employment Period ends that has not been paid on or
             prior to the date the Employment Period ends (other than (x) Base Salary and (y)
             Incentive Compensation deferred pursuant to Executive's election), (c) any
             accrued but unused vacation days and (d) any business expenses incurred on or
             prior to the date of the Executive's termination that are eligible for
             reimbursement in accordance with the Company's expense reimbursement policies as
             then in effect.


Source: DEAN FOODS CO, 10-K, March 16, 2005
                   "SPECIAL PAYMENT" means an amount equal to three times the sum of (a) the
             annual Base Salary payable to Executive immediately prior to the end of the
             Employment Period (or in the event a reduction in Base Salary is the basis for a
             Termination for Good Reason, then the Base Salary in effect immediately prior to
             such reduction) and (b) the Target Incentive Compensation for the calendar year
             in which the Employment Period ends pursuant to Section 8(a).

                   "TARGET INCENTIVE COMPENSATION" means with respect to any calendar year
             the annual Incentive Compensation Executive would have been entitled to receive
             under Section 4(b) for such calendar year had he remained employed by the
             Company for the entire calendar year and assuming that all targets for such
             calendar year had been met.

                   "VESTED BENEFITS" means amounts which are vested or which Executive is
             otherwise entitled to receive under the terms of or in accordance with any plan,
             policy, practice or program of, or any contract or agreement with, the Company
             or any of its subsidiaries, at or subsequent to the date of his termination
             without regard to the performance by Executive of further services or the
             resolution of a contingency.

                   (f) Resignation upon Termination. Effective as of any Date of Termination
             under this Section 8, Executive shall resign, in writing, from all positions
             then held by him with the Company and its affiliates.

                   (g) Timing of Payments. Earned Compensation, the Basic Payment and the
             Special Payment shall be paid in a single lump sum as soon as practicable, but
             in no event more than 15 days, following the end of the Employment Period.
             Vested Benefits shall be payable in accordance with the terms of the plan,
             policy, practice, program, contract or agreement under which such benefits have
             accrued.

                                                    13


                   (h) Payment Following a Change of Control. If the aggregate of all
             payments or benefits made or provided to Executive with respect to any of the
             equity compensation provided under Section 5 or Section 6, under Section
             8(e)(iii)(A), if applicable, and under all other plans and programs of the
             Company (the "AGGREGATE PAYMENT") is determined to constitute a Parachute
             Payment, as such term is defined in Section 280G(b)(2) of the Code, the Company
             shall pay to Executive, prior to the time any excise tax imposed by Section 4999
             of the Code (the "EXCISE TAX") is payable with respect to such Aggregate
             Payment, an additional amount which, after the imposition of all income,
             employment and excise taxes thereon, is equal to the Excise Tax on the Aggregate
             Payment. The determination of whether the Aggregate Payment constitutes a
             Parachute Payment and, if so, the amount to be paid to Executive and the time of
             payment pursuant to this Section 8(h) shall be made by the Company's independent
             auditor or, if such independent auditor is unwilling or unable to serve in this
             capacity, such other nationally recognized accounting firm selected by the
             Company with the consent of the person serving as the Chief Executive Officer of
             the Company immediately prior to the Change of Control, which consent shall not
             be unreasonably withheld (the "AUDITOR").

                   (i) Full Discharge of Company Obligations. The amounts payable to
             Executive pursuant to this Section 8 following termination of his employment
             (including amounts payable with respect to Vested Benefits) shall be in full and
             complete satisfaction of Executive's rights under this Agreement and any other
             claims he may have in respect of his employment by the Company or any of its
             subsidiaries other than claims for common law torts or under other contracts
             between Executive and the Company or its subsidiaries. Such amounts shall
             constitute liquidated damages with respect to any and all such rights and claims
             and, upon Executive's receipt of such amounts, the Company shall be released and
             discharged from any and all liability to Executive in connection with this
             Agreement or otherwise in connection with Executive's employment with the
             Company and its subsidiaries and, as a condition to payment of any such amounts
             that are in excess of the Earned Compensation and the Vested Benefits, following
             the Date of Termination and if requested by the Company, Executive shall execute
             a release in favor of the Company in the form approved by the Company.

                   (j) No Mitigation; No Offset. In the event of any termination of
             employment under this Section 8, Executive shall be under no obligation to seek
             other employment and there shall be no offset against amounts due Executive
             under this Agreement on account of any remuneration attributable to any
             subsequent employment that he may obtain except as specifically provided with
             regard to the continuation of benefits in Section 8(e)(v).

                9. Noncompetition and Confidentiality.

                   (a) Noncompetition. During the Employment Period and, in the event that
             Executive's employment is terminated for any reason other than death, a

Source: DEAN FOODS CO, 10-K, March 16, 2005
             Termination Without Cause or a Termination for Good Reason, for a period of 12
             months following

                                                    14


             the Date of Termination (the "POST-TERMINATION PERIOD"), Executive shall not
             become associated with any entity, whether as a principal, partner, employee,
             consultant or shareholder (other than as a holder of not in excess of 1% of the
             outstanding voting shares of any publicly traded company), that is actively
             engaged in any geographic area in any business which is in competition with a
             business conducted by the Company at the time of the alleged competition and, in
             the case of the Post-Termination Period, at the Date of Termination.

                   (b) Confidentiality. Without the prior written consent of the Company,
             except (i) in the course of carrying out his duties hereunder or (ii) to the
             extent required by an order of a court having competent jurisdiction or under
             subpoena from an appropriate government agency, Executive shall not disclose any
             trade secrets, customer lists, drawings, designs, information regarding product
             development, marketing plans, sales plans, manufacturing plans, management
             organization information (including data and other information relating to
             members of the Board and management), operating policies or manuals, business
             plans, financial records, packaging design or other financial, commercial,
             business or technical information relating to the Company or any of its
             subsidiaries or information designated as confidential or proprietary that the
             Company or any of its subsidiaries may receive belonging to suppliers, customers
             or others who do business with the Company or any of its subsidiaries
             (collectively, "CONFIDENTIAL INFORMATION") to any third person unless such
             Confidential Information has been previously disclosed to the public by the
             Company or has otherwise become available to the public (other than by reason of
             Executive's breach of this Section 9(b)).

                   (c) Company Property. Promptly following termination of Executive's
             employment, Executive shall return to the Company all property of the Company,
             and all copies thereof in Executive's possession or under his control, except
             that Executive may retain his personal notes, diaries, Rolodexes, calendars and
             correspondence.

                   (d) Non-Solicitation of Employees. During the Employment Period and during
             the one year period following any termination of Executive's employment for any
             reason, Executive shall not, except in the course of carrying out his duties
             hereunder, directly or indirectly induce any employee of the Company or any of
             its subsidiaries to terminate employment with such entity, and shall not
             directly or indirectly, either individually or as owner, agent, employee,
             consultant or otherwise, knowingly employ or offer employment to any person who
             is or was employed by the Company or a subsidiary thereof unless such person
             shall have ceased to be employed by such entity for a period of at least 6
             months.

                   (e) Injunctive Relief with Respect to Covenants. Executive acknowledges
             and agrees that the covenants and obligations of Executive with respect to
             noncompetition, nonsolicitation, confidentiality and Company property relate to
             special, unique and extraordinary matters and that a violation of any of the
             terms of such covenants and obligations may cause the Company irreparable injury
             for which adequate

                                                    15


             remedies are not available at law. Therefore, Executive agrees that the Company
             shall be entitled to an injunction, restraining order or such other equitable
             relief restraining Executive from committing any violation of the covenants and
             obligations contained in this Section 9. These injunctive remedies are
             cumulative and are in addition to any other rights and remedies the Company may
             have at law or in equity.

                10. Miscellaneous.

                   (a) Survival. Sections 7(d) (relating to the Company's obligation to
             indemnify Executive), 8 (relating to early termination), 9 (relating to
             noncompetition, nonsolicitation and confidentiality) and 10(o) (relating to
             governing law) shall survive the termination hereof, whether such termination
             shall be by expiration of the Employment Period or an early termination pursuant
             to Section 8 hereof.

                   (b) Binding Effect. This Agreement shall be binding on, and shall inure to
             the benefit of, the Company and any person or entity that succeeds to the
             interest of the Company (regardless of whether such succession does or does not
             occur by operation of law) by reason of a merger, consolidation or
             reorganization involving the Company or a sale of all or substantially all of

Source: DEAN FOODS CO, 10-K, March 16, 2005
             the assets of the Company, provided that the assignee or transferee is the
             successor to all or substantially all of the assets of the Company and such
             assignee or transferee assumes the liabilities, obligations and duties of the
             Company, as contained in this Agreement, either contractually or as a matter of
             law. The Company further agrees that, in the event of a sale of assets as
             described in the preceding sentence, it shall use its reasonable best efforts to
             cause such assignee or transferee to expressly assume the liabilities,
             obligations and duties of the Company hereunder. This Agreement shall also inure
             to the benefit of Executive's heirs, executors, administrators and legal
             representatives and beneficiaries as provided in Section 10(d).

                    (c) Assignment. Except as provided under Section 10(b), neither this
             Agreement nor any of the rights or obligations hereunder shall be assigned or
             delegated by any party hereto without the prior written consent of the other
             party.

                   (d) Beneficiaries/References. Executive shall be entitled, to the extent
             permitted under any applicable law and the terms of any applicable plan, to
             select and change a beneficiary or beneficiaries to receive any compensation or
             benefit payable hereunder following Executive's death by giving the Company
             written notice thereof. In the event of Executive's death or a judicial
             determination of his incompetence, reference in this Agreement to Executive
             shall be deemed, where appropriate, to refer to his beneficiary, estate or other
             legal representative.

                   (e) Resolution of Disputes. Any disputes arising under or in connection
             with this Agreement shall, at the election of Executive or the Company, be
             resolved by binding arbitration, to be held in Chicago, Illinois in accordance
             with the rules and procedures of the American Arbitration Association. Judgment
             upon the award rendered by the arbitrator(s) may be entered in any court having
             jurisdiction thereof. Costs of the

                                                      16


             arbitration shall be borne by the Company. Unless the arbitrator determines that
             Executive did not have a reasonable basis for asserting his position with
             respect to the dispute in question, the Company shall also reimburse Executive
             for his reasonable attorneys' fees incurred with respect to any arbitration.
             Pending the resolution of any arbitration or court proceeding, the Company shall
             continue payment of all amounts due Executive under this Agreement and all
             benefits to which Executive is entitled at the time the dispute arises (other
             than the amounts which are the subject of such dispute).

                   (f) Entire Agreement. This Agreement constitutes the entire agreement
             between the parties hereto with respect to the matters referred to herein. No
             amendment to this Agreement shall be binding between the parties unless it is in
             writing and signed by the party against whom enforcement is sought. There are no
             promises, representations, inducements or statements between the parties other
             than those that are expressly contained herein. Executive acknowledges that he
             is entering into this Agreement of his own free will and accord, and with no
             duress, that he has been represented and fully advised by competent counsel in
             entering into this Agreement, that he has read this Agreement and that he
             understands it and its legal consequences.

                   (g) Representations. Executive represents that his employment hereunder
             and compliance by him with the terms and conditions of this Agreement will not
             conflict with or result in the breach of any agreement to which he is a party or
             by which he may be bound. The Company is a corporation duly organized, validly
             existing and in good standing under the laws of the State of Delaware. The
             Company has the full corporate power and authority to execute and deliver this
             Agreement. The Company has taken all action required by law, the Certificate of
             Incorporation, its By-Laws or otherwise required to be taken by it to authorize
             the execution, delivery and performance by it of this Agreement. This Agreement
             is a valid and binding obligation of the Company, enforceable against the
             Company in accordance with its terms.

                   (h) Severability; Reformation. In the event that one or more of the
             provisions of this Agreement shall become invalid, illegal or unenforceable in
             any respect, the validity, legality and enforceability of the remaining
             provisions contained herein shall not be affected thereby. In the event any of
             Section 9(a), (b) or (d) is not enforceable in accordance with its terms,
             Executive and the Company agree that such Section shall be reformed to make such
             Section enforceable in a manner which provides the Company the maximum rights
             permitted at law.

                   (i) Waiver. Waiver by any   party hereto of any breach or default by   the
             other party of any of the terms   of this Agreement shall not operate as a   waiver
             of any other breach or default,   whether similar to or different from the   breach
             or default waived. No waiver of   any provision of this Agreement shall be   implied

Source: DEAN FOODS CO, 10-K, March 16, 2005
             from any course of dealing between the parties hereto or from any failure by
             either party hereto to assert its or his rights hereunder on any occasion or
             series of occasions.

                                                           17


                   (j) Notices. Any notice required or desired to be delivered under this
             Agreement shall be in writing and shall be delivered personally, by courier
             service, by registered mail, return receipt requested, or by telecopy and shall
             be effective upon actual receipt when delivered or sent by telecopy and upon
             mailing when sent by registered mail, and shall be addressed as follows (or to
             such other address as the party entitled to notice shall hereafter designate in
             accordance with the terms hereof):

                    If to the Company:

                               857-897 School Place
                               P.O. Box 19057
                               Green Bay, Wisconsin 54307
                               Attention: General Counsel
                               Telecopy No.: (920) 497-4604

                               prior to the Registration Date, with a copy to:

                               Dean Foods Company
                               2515 McKinney Avenue
                               Suite 1200
                               Dallas, Texas 75201
                               Attention: General Counsel
                               Telecopy No.: (214) 303-3413

                    If to Executive:

                               1227 W. Kajer Lane
                               Lake Forest, Illinois      60045

                               with a copy to:

                               Vedder, Price, Kaufman & Kammholz, P.C.
                               222 N. LaSalle Street
                               Chicago, Illinois 60601
                               Attention: Robert J. Stucker, Esq.
                                           Thomas P. Desmond, Esq.

                   (k) Amendments. This Agreement may not be altered, modified or amended
             except by a written instrument signed by each of the parties hereto.

                   (l) Headings. Headings to Sections in this Agreement are for the
             convenience of the parties only and are not intended to be part of or to affect
             the meaning or interpretation hereof.

                                                           18


                   (m) Counterparts. This Agreement may be executed in counterparts, each of
             which shall be deemed an original but all of which together shall constitute one
             and the same instrument.

                   (n) Withholding. Any payments provided for herein shall be reduced by any
             amounts required to be withheld by the Company from time to time under
             applicable federal, state or local income or employment tax laws or similar
             statutes or other provisions of law then in effect.

                   (o) Governing Law. This Agreement shall be governed by the laws of the
             State of Delaware, without reference to principles of conflicts or choice of law
             under which the law of any other jurisdiction would apply.

                                              -- Signature page follows --

                                                           19


                   IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
             by its duly authorized officer and Executive has hereunto set his hand as of the
             day and year first above written.

                                                                             DEAN SPECIALTY FOODS
                                                                                  HOLDINGS, INC.


Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                           By:________________
                                                                              Name:
                                                                              Title:

                                                                          EXECUTIVE:
                                                                          ____________________
                                                                          David B. Vermylen

                                                     20


                                                                                    Schedule A

             On each of January 31, 2006, January 31, 2007 and January 31, 2008, one-third of
             the Basic Restricted Shares shall vest, provided that the Company's Total
             Shareholder Return for the period commencing on the fourth trading day following
             the Registration Date (the "COMMENCEMENT DATE") and ending on such January 31st
             equals or exceeds the median of the Total Shareholder Return for such period for
             the companies in the Selected Peer Group (as defined below).

             In addition, on each of January 31, 2007, January 31, 2008, January 31, 2009 and
             January 31, 2010, any Basic Restricted Shares that could have vested, but that
             did not vest, on any preceding January 31st shall vest on such subsequent date
             if the Company's Total Shareholder Return for the period from the Commencement
             Date through the applicable January 31st shall equal or exceed the median of the
             Total Shareholder Return for such period for the companies in the Selected Peer
             Group.

             As used herein, "TOTAL SHAREHOLDER RETURN" shall mean the percentage return
             received by all shareholders of the relevant company during the applicable
             measurement period, including stock price appreciation and dividends, and shall
             be calculated as follows:

                Ending Stock Price (1) - Beginning Stock Price (2)+ Dividend Reinvestment (3)
                -----------------------------------------------------------------------------
                                         Beginning Stock Price (2)

             (1)    With respect to each of the Company and each company in the Selected Peer
                    Group, the average of the closing prices of its common stock for the 20
                    consecutive trading day period ending on the applicable January 31st (or
                    if the applicable January 31 is not a trading date, the immediately
                    preceding trading date).

             (2)    With respect to each of the Company and each company in the Selected Peer
                    Group, the average of the closing prices of its common stock on the
                    Registration Date and each of the four consecutive trading days
                    immediately following the Registration Date.

             (3)    Assumes any dividends paid on the common stock of the Company or any
                    company in the Selected Peer Group are used to purchase its common stock
                    at the closing stock price on the date that such dividends are payable,
                    and includes the value of such additional shares of such common stock
                    (based on the Ending Stock Price for such common stock).

             As used herein, "SELECTED PEER GROUP" shall mean 20 or more companies selected
             by the Board of Directors of the Company (or any authorized committee thereof)
             from

                                                     21


             among packaged food companies whose securities are registered to trade on a U.S.
             national securities exchange or automated quotation system (including, but not
             limited to NASDAQ) (the "PEER COMPANIES") on or as soon as practicable after the
             Registration Date; provided that in no event shall any Ineligible Company be
             selected to be a member of the Selected Peer Group. An "INELIGIBLE COMPANY"
             shall mean any Peer Company (i) in which significant portion of its voting
             securities is held by another corporate entity (other than an open-ended
             investment company); (ii) has filed for protection under the Federal bankruptcy
             law or any similar law, (iii) which is not organized, based and majority-owned
             in the United States, (iv) is party to any agreement the consummation of which
             would cause such Peer Company to cease to be publicly traded (or be described in
             subclause (i) or (iii)), or (v) which has announced an intention to be sold or
             cease to be publicly traded or to take actions which would cause it to be
             described in subclause (i) or (iii). To the extent that any Peer Company
             initially selected as part of the Selected Peer Group with respect to a
             measurement period shall become an Ineligible Company prior to the end of such
             period, such company shall be excluded from the Selected Peer Group for such
             period. The Selected Peer Group will be reviewed annually to determine whether
             any of its members shall have become Ineligible Companies.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                                              22




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                EXHIBIT 10.15

                                              EMPLOYMENT AGREEMENT

                   EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of January 27, 2005, by
             and between Dean Specialty Foods Holdings, Inc., a Delaware corporation (the
             "COMPANY"), and E. Nichol McCully (the "EXECUTIVE").

                                                W I T N E S S E T H:

                   WHEREAS, the Company's parent corporation, Dean Foods Company ("DEAN"),
             intends, subject to certain conditions, to distribute the common stock, par
             value $.01 per share, of the Company (the "COMMON STOCK") owned by Dean to its
             shareholders, whereby the Company would become a stand-alone publicly traded
             corporation;

                   WHEREAS, Executive is willing to enter into this Agreement in anticipation
             of the Company becoming a stand-alone publicly traded corporation through the
             distribution of the Common Stock to Dean's shareholders;

                   WHEREAS, to effect such a spin-off and to position the Company to maximize
             its value for Dean's shareholders, it is necessary that the Company have a
             strong and experienced management team with a proven track record in developing
             and growing a company in the consumer packaged goods industry;

                   WHEREAS, Executive is one of several members of a management team (the
             "TEAM") that possesses the skills and experience necessary to undertake the
             challenges of developing the Company, including through acquisitions;

                   WHEREAS, in light of these skills and experience, the Company desires to
             secure the services of Executive and the other members of the Team, and is
             willing to enter into this Agreement embodying the terms of the employment of
             Executive by the Company, which terms include one or more substantial
             equity-based compensation awards; and

                   WHEREAS, Executive is willing to accept such employment and enter into
             such Agreement, subject to Dean making available to Executive and to the other
             members of the Team the opportunity to invest in the common stock of the Company
             and making the undertakings regarding the governance and management of the
             Company set forth in the in the stockholders agreement (the "STOCKHOLDERS
             AGREEMENT") to be entered into by the Company, Dean, Executive, other members of
             the Team, and certain other investors who are affiliates of the Team
             contemporaneously with this Agreement; and

                   WHEREAS, in order to give Executive and the Team the opportunity to
             acquire an equity interest in the Company and as an incentive for Executive to
             participate in the affairs of the Company, the Company is willing to sell to
             Executive, and Executive

                                                         1



             desires to purchase, shares of common stock (the "COMMON STOCK"), subject to the
             terms and conditions set forth in the Subscription Agreement (the "SUBSCRIPTION
             AGREEMENT") to be entered into contemporaneously with this Agreement and in the
             Stockholders Agreement.

                         NOW, THEREFORE, in consideration of the mutual covenants herein
             contained, the Company and Executive hereby agree as follows:

                   1. Employment. Upon the terms and subject to the conditions of this
             Agreement and, unless earlier terminated as provided in Section 8, the Company
             hereby employs Executive and Executive hereby accepts employment by the Company
             for the period (i) commencing on the date hereof (the "COMMENCEMENT DATE") and
             (ii) ending on the third anniversary of (A) the Commencement Date or, (B) if the
             Common Stock shall become registered under Section 12(g) of the Securities
             Exchange Act of 1934, as amended (the "EXCHANGE ACT"), during the term hereof,
             the third anniversary of the date of such registration shall have become
             effective and trading of Common Stock on a registered national securities
             exchange or automated quotation system (including, but not limited to, NASDAQ)
             shall have commenced (the "REGISTRATION DATE"); provided, however, that the term
             of this Agreement shall automatically be extended for one additional year on the
             third anniversary of the Registration Date and each subsequent anniversary
             thereof unless not less than 90 days prior to such anniversary date either party
             shall give the other written notice that he or it does not want the term to
             extend as of such anniversary date. The period during which Executive is
             employed pursuant to this Agreement (including pursuant to any extension of the

Source: DEAN FOODS CO, 10-K, March 16, 2005
             term hereof pursuant to the proviso in the immediately preceding sentence) shall
             be referred to herein as the "EMPLOYMENT PERIOD."

                   2. Position and Duties. Executive shall serve as a Senior Vice President
             and the Chief Financial Officer of the Company until the first anniversary of
             the Commencement Date or such later date as shall be mutually agreed by the
             parties (the "CFO PERIOD"), and shall serve as the Vice President of Strategic
             Planning and Business Development for the remainder of the Employment Period.
             Executive shall also serve in such other position or positions with the Company
             and its majority-owned subsidiaries consistent with the foregoing position as
             the Board of Directors of the Company (the "BOARD") may specify or the Company
             and Executive may mutually agree upon from time to time. During the Employment
             Period, Executive shall have the duties, responsibilities and obligations
             customarily assigned to individuals at comparable publicly traded companies
             serving in the position or positions in which Executive serves hereunder.
             Executive shall devote substantially all his business time to the services
             required of him hereunder, except for vacation time and reasonable periods of
             absence due to sickness, personal injury or other disability, and shall perform
             such services to the best of his abilities. Subject to the provisions of Section
             9, nothing herein shall preclude Executive from (i) engaging in charitable
             activities and community affairs, (ii) managing his personal investments and
             affairs or (iii) serving on the board of directors or other governing body

                                                    2



             of any corporate or other business entity, so long as such service is not in
             violation of the covenants contained in Section 9 or the governance principles
             established for the Company by the Board, as in effect from time to time,
             provided that in no event may such activities, either individually or in the
             aggregate, materially interfere with the proper performance of Executive's
             duties and responsibilities hereunder.

                   3. Place of Performance. The Company shall establish its headquarters
             office in Chicago, Illinois metropolitan area at which Executive shall perform
             services on such basis as Executive deems necessary or appropriate for the
             performance of his duties. Executive shall also have perform services at the
             Company's offices in Green Bay, Wisconsin, on such basis as Executive deems
             necessary or appropriate for the performance of his duties.

                    4. Compensation.

                         (a) Base Salary. During the CFO Period, the Company shall pay
             Executive a base salary at the annual rate of $400,000. Following the CFO
             Period, the Company shall reduce Executive's base salary in good faith in an
             amount commensurate with the reduction of his responsibilities hereunder.
             Beginning in 2006, the Board shall review Executive's base salary no less
             frequently than annually and may increase such base salary in its discretion.
             The amount of annual base salary payable under this Section 4(a) shall be
             reduced, however, to the extent Executive elects to defer such salary under the
             terms of any deferred compensation or savings plan or arrangement maintained or
             established by the Company or any of its subsidiaries. Executive's annual base
             salary payable hereunder, including any increases or decreases thereto, without
             reduction for any amounts deferred as described above, is referred to herein as
             "BASE SALARY". The Company shall pay Executive the portion of his Base Salary
             not deferred in accordance with its standard payroll practices, but no less
             frequently than in equal monthly installments.

                         (b) Incentive Compensation. For each full calendar year during the
             Employment Period, Executive shall be eligible to receive an annual incentive
             bonus from the Company, with a target bonus opportunity of not less than 60% of
             his Base Salary, which will be payable, if at all, upon the achievement by
             Executive and/or the Company of performance objectives to be established by the
             Board in consultation with the Company's Chief Executive Officer and
             communicated to Executive during the first quarter of such year (the "INCENTIVE
             COMPENSATION"). Without limiting the generality of the foregoing, the actual
             amount payable to Executive in respect of the Incentive Compensation may be more
             or less than the targeted opportunity (including zero) based on the actual
             results against the pre-established performance objectives.

                   5. Stock Purchase. Substantially contemporaneously with the Commencement
             Date, Executive shall purchase the number of shares of Common Stock of the
             Company specified in the Subscription Agreement related to the purchase of such
             shares, to be entered into by Executive and the Company (the "SUBSCRIPTION
             AGREEMENT"). The

                                                    3




Source: DEAN FOODS CO, 10-K, March 16, 2005
             terms and conditions of such purchase shall be as set forth in the Subscription
             Agreement, and such shares shall be subject to the limitations and restrictions,
             including, without limitation, the restrictions on transfer and the put and call
             rights set forth in the Stockholders Agreement.

                    6. Public Equity Awards.

                         (a) Basic Restricted Stock Grant. On the fourth trading day
             following the Registration Date, the Company shall grant Executive an award of
             that number of whole restricted shares of Common Stock (the "BASIC RESTRICTED
             SHARES") as is equal to (or most closely approximates) 0.30% of the Outstanding
             Common Stock on the date of grant. The Basic Restricted Shares shall vest and
             become freely transferable in the proportions, and based upon achievement of the
             total shareholder return objectives, determined pursuant to Schedule A hereto,
             so long as Executive is continuously employed by the Company through the
             applicable vesting date. Any Basic Restricted Shares that have not become vested
             and freely transferable on or before the fifth anniversary of the grant date
             shall be forfeited. For purposes of this Agreement, "OUTSTANDING COMMON STOCK"
             shall mean the sum of (x) the number of shares Common Stock that are issued and
             outstanding on the Registration Date and (y) the number of shares of Common
             Stock issuable pursuant to any stock options granted by Dean prior to the
             Registration Date in respect of its common stock and converted into the right to
             purchase Common Stock in connection with or in contemplation of the Spin-Off.

                         (b) Supplemental Restricted Stock Unit Grant. On the fourth trading
             day following the Registration Date, Executive shall be granted, automatically
             and without any further action on the part of the Company or the Board, an award
             of restricted stock units, with each such unit representing a right to receive
             one share of Common Stock on the terms and conditions set forth herein (the
             "SUPPLEMENTAL RESTRICTED SHARE UNITS"). The number of Supplemental Restricted
             Share Units subject to such grant shall be equal to the quotient (rounded up to
             the nearest whole number) obtained by dividing (x) by (y), where (x) and (y)
             are:

                         (x) the product of (i) the excess, if any, of (A) the Initial Fair
             Market Value over (B) the Adjusted Per Share Purchase Price and (ii) that number
             of whole shares of Common Stock as is equal to (or most closely approximates)
             0.60% of the Outstanding Common Stock on the date of grant; and

                           (y) the Initial Fair Market Value.

                   For purposes of this Agreement, "INITIAL FAIR MARKET VALUE" shall mean the
             average of the closing values on the Registration Date and on each of the next
             four trading days immediately following the Registration Date, as reported on
             the principal exchange or automated quotation system on which the Common Stock
             is traded or

                                                      4



             reported. "ADJUSTED PER SHARE PURCHASE PRICE" shall mean the $5,000 purchase
             price per share of Common Stock, appropriately adjusted to reflect any stock
             split or share combination involving the Common Stock, any recapitalization of
             the Company, any adjustment pursuant to Section 4.3(b) of the Stockholders
             Agreement, or any merger, consolidation, reorganization or similar corporate
             event involving the Company occurring on or after the Commencement Date and on
             or before the Registration Date.

                   Except as otherwise provided in this Agreement, 50% of the Supplemental
             Restricted Share Units shall vest on the first anniversary of the Registration
             Date so long as Executive is continuously employed by the Company through the
             first anniversary of the Commencement Date, and 25% of the Supplemental Share
             Units shall vest on the second and third anniversaries of the Registration Date
             so long as Executive is continuously employed by the Company through such second
             and third anniversaries. Notwithstanding the foregoing, no Supplemental
             Restricted Share Units shall become vested on any such anniversary date if, on
             such date, the average of the closing prices of a share of Common Stock on the
             principal trading market on which such shares are traded or reported for the 20
             trading day period ended on such date (or, if such date is not a business day,
             the 20 trading day period ended on the last trading day occurring immediately
             prior thereto) does not exceed the Initial Fair Market Value (the "MINIMUM VALUE
             REQUIREMENT"). In the event that the Minimum Value Requirement is not satisfied
             on any applicable anniversary date, the Supplemental Restricted Share Units that
             would otherwise have vested on such anniversary date shall vest on any
             subsequent anniversary date or on any date after the third anniversary date
             (treating each such date as an anniversary date for purposes of the 20 day
             trading measurement period) on which both Executive is still an employee of the
             Company (except with respect to the first installment) and the Minimum Value

Source: DEAN FOODS CO, 10-K, March 16, 2005
             Requirement is satisfied; provided that any such Supplemental Restricted Share
             Units that have not become vested on or before the fifth anniversary of the
             grant date shall be forfeited. The shares of Common Stock corresponding to any
             vested Supplemental Restricted Share Units, if any, shall be distributed to
             Executive as soon as practicable, but not later than five (5) business days
             following the earlier to occur of (i) the fifth anniversary of the date of grant
             or (ii) the sixth month anniversary of the date Executive's employment with the
             Company terminates, unless the Executive elects (in a manner consistent with the
             applicable requirements of Section 409A of the Internal Revenue Code (the
             "CODE")) to defer the date upon which the shares of Common Stock corresponding
             to the vested Supplement Restricted Share Units shall be distributed.

                   (c) Stock Option. On the fourth trading day following the Registration
             Date, the Company shall automatically and without any further action on the part
             of the Company or the Board grant to Executive a non-qualified stock option to
             purchase the number of shares of Common Stock equal to the remainder of (i) the
             number of whole shares of Common Stock specified in Section 6(b)(x)(ii) minus
             (ii) the number of Supplemental Restricted Share Units awarded pursuant to
             Section 6(b) (the "OPTION"). The exercise price per share with respect to the
             Option shall be equal to the Initial Fair

                                                    5



             Market Value. The Option shall become vested and exercisable in three
             installments, the first of which shall be equal to 50% of the number of shares
             covered by the Option and the second and third of which shall each be 25% of
             such number of shares. The first installment shall become vested and exercisable
             on the first anniversary of the Commencement Date and the second and third
             installments shall become vested and exercisable on each of the second and third
             anniversaries of the grant date of such Option, so long as Executive is
             continuously employed by the Company through the applicable anniversary date.

                         (d) Stock Incentive Plan. Each of the Basic Restricted Shares, the
             Supplemental Restricted Shares and the Option shall be granted pursuant to a
             stock incentive plan (the "INCENTIVE PLAN") to be adopted by the Company prior
             to the Registration Date that will authorize for issuance thereunder at least
             (i) 13% of the Outstanding Common Stock plus (ii) the number of shares of Common
             Stock issuable pursuant to any stock options granted by Dean prior to the
             Registration Date in respect of its common stock and converted into the right to
             purchase Common Stock in connection with or in contemplation of the Spin-Off as
             provided in the Stockholders Agreement. Such Incentive Plan shall have terms and
             conditions which will permit the issuance of the awards to the Executive
             specified in this Section 6 and shall not contain any other term or condition
             that has an adverse effect on any award to be made to Executive pursuant to this
             Section 6.

                         (e) Award Agreements. Each of the Basic Restricted Shares,
             Supplemental Restricted Shares and the Option shall be subject to an award
             agreement having the terms and conditions specified in the preceding
             subparagraphs of this Section 6 and otherwise consistent with the terms and
             conditions of the Incentive Plan. Each such agreement shall provide for full
             vesting of such awards upon a Change of Control and shall provide that Executive
             shall have the right to elect that any applicable tax withholding requirements
             with respect to the vesting, exercise or distribution of Common Stock be
             satisfied by having the Company withhold shares of Common Stock subject to such
             award having a value equal to the minimum required applicable tax withholding,
             and that Executive may exercise the Option using previously owned shares of
             Common Stock, including Basic Restricted Shares that are still subject to
             forfeiture, provided that that number of shares deliverable upon exercise of the
             Option that corresponds to the number of unvested Basic Restricted Shares
             surrendered will be subject to the same forfeiture provisions and restrictions
             on transfer as the Basic Restricted Shares surrendered to exercise such Option,
             in whole or in part. In addition, the Option award agreement shall provide that
             so long as Executive remains continuously employed by the Company through the
             first anniversary of the Commencement Date, the first installment of such Option
             shall remain exercisable for the remainder of the term of such Option.

                         (f) Capital Adjustments. Notwithstanding anything to the contrary
             contained in Section 5 or this Section 6, the exercise price of, and the number
             of Shares subject to, the Option, the number of Units subject to the
             Supplemental Restricted Share Units, and

                                                    6



             the Minimum Value Requirement shall be appropriately adjusted, by the Board in
             its sole discretion, to reflect any extraordinary dividend, any dividend payable

Source: DEAN FOODS CO, 10-K, March 16, 2005
             in shares of capital stock, any stock split or share combination involving the
             Common Stock, any recapitalization of the Company, any merger, consolidation,
             reorganization or similar corporate event involving the Company occurring after
             the Registration Date.

                         (g) Impact on Future Grants. Unless following the Registration Date
             the Board shall determine that special circumstances warrant the grant of such
             additional awards as it or any duly authorized committee thereof shall, in its
             sole discretion, determine, it is the intent and expectation of the parties that
             Executive will not receive any further grants of equity-based compensation prior
             to the third anniversary of the Commencement Date. Following such third
             anniversary, Executive shall be eligible to receive equity-based compensation
             awards in accordance the Company's generally applicable compensation practices,
             as then in effect.

                    7. Benefits, Perquisites and Expenses.

                         (a) Benefits. During the Employment Period, Executive shall be
             eligible to participate in (i) each welfare benefit plan sponsored or maintained
             by the Company for its senior executive officers, including, without limitation,
             each group life, hospitalization, medical, dental, health, accident or
             disability insurance or similar plan or program of the Company, and (ii) each
             pension, profit sharing, retirement, deferred compensation or savings plan
             sponsored or maintained by the Company for its senior executive officers, in
             each case, whether now existing or established hereafter, in accordance with the
             generally applicable provisions thereof, as the same may be amended from time to
             time.

                         (b) Perquisites. During the Employment Period, Executive shall be
             entitled to receive such perquisites as are generally provided to other senior
             executive officers of the Company in accordance with the then current policies
             and practices of the Company.

                         (c) Business Expenses. During the Employment Period, the Company
             shall pay or reimburse Executive for all reasonable expenses incurred or paid by
             Executive in the performance of Executive's duties hereunder, upon presentation
             of expense statements or vouchers and such other information as the Company may
             require and in accordance with the generally applicable policies and procedures
             of the Company.

                         (d) Indemnification. The Company agrees that if Executive is made a
             party, or is threatened to be made a party, to any action, suit or proceeding,
             whether civil, criminal, administrative or investigative (a "PROCEEDING"), by
             reason of the fact that he is or was a director, officer or employee of the
             Company or any subsidiary or affiliate thereof, or is or was serving at the
             request of the Company as a director, officer, member, employee or agent of
             another corporation, partnership, joint venture, trust or other enterprise,
             including, in each case, service with respect to employee benefit plans, whether
             or not the basis of such Proceeding is Executive's alleged action in an official

                                                     7


             capacity while serving as a director, officer, member, employee or agent,
             Executive shall be indemnified and held harmless by the Company to the fullest
             extent legally permitted or authorized by the Company's certificate of
             incorporation or by-laws or resolutions of the Board or, if greater, by the laws
             of the State of Delaware, against all cost, expense, liability and loss
             (including, without limitation, attorney's fees, judgments, fines or penalties
             and amounts paid or to be paid in settlement) reasonably incurred or suffered by
             Executive in connection therewith, and such indemnification shall continue as to
             Executive even if he has ceased to be a director, officer, member, employee or
             agent of the Company or other entity and shall inure to the benefit of
             Executive's heirs, executors and administrators. If Executive serves as a
             director, officer, member, partner, employee or agent of another corporation,
             partnership, joint venture, limited liability company, trust or other enterprise
             (including, in each case, service with respect to employee benefit plans) which
             is a subsidiary or affiliate of the Company, it shall be presumed for purposes
             of this Section 7(d) that Executive serves or served in such capacity at the
             request of the Company. The Company shall advance to Executive all reasonable
             costs and expenses incurred by him in connection with a Proceeding within 30
             days after receipt by the Company of a written request for such advance. Such
             request shall include an undertaking by Executive to repay the amount of such
             advance, if it shall ultimately be determined that he is not entitled to be
             indemnified against such costs and expenses. The Company agrees to continue and
             maintain a directors' and officers' liability insurance policy covering
             Executive to the extent the Company provides such coverage for its other
             executive officers or directors.

                    8. Termination of Employment.

Source: DEAN FOODS CO, 10-K, March 16, 2005
                         (a) Early Termination of the Employment Period. Notwithstanding
             Section 1, the Employment Period shall end upon the earliest to occur of (i) a
             termination of Executive's employment on account of Executive's death, (ii) a
             Termination due to Disability, (iii) a Termination for Cause, (iv) a Termination
             Without Cause, (v) a Termination for Good Reason, (vi) a Termination due to
             Retirement or (vii) a Voluntary Termination.

                         (b) Termination Due to Death or Disability. In the event that
             Executive's employment hereunder terminates due to his death or as a result of a
             Termination due to Disability (as defined below), no termination benefits shall
             be payable to or in respect of Executive except as provided in Section 8(e). For
             purposes of this Agreement, "TERMINATION DUE TO DISABILITY" means a termination
             of Executive's employment upon written notice from the Company because Executive
             has been incapable, regardless of any reasonable accommodation by the Company,
             of substantially fulfilling the positions, duties, responsibilities and
             obligations set forth in this Agreement because of physical, mental or emotional
             incapacity resulting from injury, sickness or disease for a period of more than
             (i) four consecutive months or (ii) an aggregate of six months in any twelve
             month period. Any question as to the existence or extent of Executive's
             disability upon which Executive and the Company cannot agree shall be determined
             by a qualified,

                                                    8



             independent physician jointly selected by the Company and Executive. If the
             Company and Executive cannot agree on the physician to make the determination,
             then the Company and Executive shall each select a physician and those
             physicians shall jointly select a third physician, who shall make the
             determination. The determination of any such physician shall be final and
             conclusive for all purposes of this Agreement. Executive or his legal
             representative or any adult member of his immediate family shall have the right
             to present to such physician such information and arguments as to Executive's
             disability as he, she or they deem appropriate, including the opinion of
             Executive's personal physician.

                         (c) Termination by the Company. The Company may terminate
             Executive's employment with the Company with or without Cause; provided that
             prior to the Registration Date, the Company may only terminate Executive's
             employment hereunder for Cause. "TERMINATION FOR CAUSE" means a termination of
             Executive's employment by the Company due to Cause. "CAUSE" means (i)
             Executive's conviction of a felony or the entering by Executive of a plea of
             nolo contendere to a felony charge, (ii) Executive's gross neglect or willful
             and intentional gross misconduct in the performance of, or willful, substantial
             and continual refusal by Executive in breach of this Agreement to perform, the
             duties, responsibilities or obligations assigned to Executive pursuant to the
             terms hereof, (iii) a TreeHouse Default (as defined in the Stockholders
             Agreement), (iv) any material breach by Executive of Section 9 of this Agreement
             or (v) a material breach by Executive of the Code of Ethics applicable to the
             Company's employees, as in effect from time to time; provided, however, that no
             act or omission shall constitute "Cause" for purposes of this Agreement unless
             the Board provides Executive, within 90 days of the Board learning of such act
             or acts or failure or failures to act, (A) written notice of the intention to
             terminate him for Cause, which notice states in detail clearly and fully the
             particular act or acts or failure or failures to act that constitute the grounds
             on which the Board reasonably believes in good faith constitutes "Cause", and
             (B) an opportunity, within thirty (30) days following Executive's receipt of
             such notice, to meet in person with the Board to explain or defend the alleged
             act or acts or failure or failures to act relied upon by the Board and, to the
             extent such cure is possible, to cure such act or acts or failure or failures to
             act. If such conduct is cured to the reasonable satisfaction of the Board, such
             notice of termination shall be revoked. Further, no act or acts or failure or
             failures to act shall be considered "willful" or "intentional" if taken in good
             faith and Executive reasonably believed such act or acts or failure or failures
             to act were in the best interests of the Company.

                         (d) Termination by Executive. Executive may terminate his employment
             with the Company for Good Reason, for Retirement or in a Voluntary Termination.
             A "TERMINATION FOR GOOD REASON" by Executive means a termination of Executive's
             employment by Executive during the CFO Period and within 90 days following (i) a
             reduction in Executive's annual Base Salary or target Incentive Compensation
             opportunity, (ii) the failure to elect or reelect Executive to any of the
             positions described in Section 2 above or the removal of him from any such
             position, (iii) a material

                                                    9




Source: DEAN FOODS CO, 10-K, March 16, 2005
             reduction in Executive's duties and responsibilities or the assignment to
             Executive of duties and responsibilities which are materially inconsistent with
             his duties or which materially impair Executive's ability to function in the
             position specified in Section 2, (iv) a material breach of any material
             provision of this Agreement by the Company, (v) the earlier of (x) October 31,
             2005 (or such later date as the Company and Executive (or Executive's agent
             appointed pursuant to the Stockholders Agreement) shall agree) and (y) the Early
             Termination Date (as defined in the Stockholders Agreement), if the Registration
             Date has not occurred on or before such earlier date other than as a result of a
             TreeHouse Default; (vi) any material breach by the Company or Dean of the
             Stockholders Agreement; (vii) any material breach by the Company of any of the
             award agreements referenced in Section 6(e); or (viii) the failure by the
             Company to obtain the assumption agreement referred to in Section 10(b) of this
             Agreement prior to the effectiveness of any succession referred to therein,
             unless the purchaser, successor or assignee referred to therein is bound to
             perform this Agreement by operation of law. Notwithstanding the foregoing, a
             termination shall not be treated as a Termination for Good Reason (i) if
             Executive shall have consented in writing to the occurrence of the event giving
             rise to the claim of Termination for Good Reason (or non-occurrence of the event
             described in clause (v) of this definition) or (ii) unless Executive shall have
             delivered a written notice to the Board within 60 days of his having actual
             knowledge of the occurrence of one of such events stating that he intends to
             terminate his employment for Good Reason and specifying the factual basis for
             such termination, and such event, if capable of being cured, shall not have been
             cured within 10 days of the receipt of such notice. A "TERMINATION DUE TO
             RETIREMENT" means Executive's voluntary termination of employment after having
             (i) completed at least five (5) years of service with the Company and (ii) the
             sum of the Executive's attained age and length of service with the Company is at
             least 62 (or such lower number as the Board shall permit). A "VOLUNTARY
             TERMINATION" shall mean a termination of employment by Executive that is not a
             Termination for Good Reason, a Termination due to Retirement or a Termination
             due to Disability, and which occurs after the Registration Date and on 90th day
             after Executive shall have given the Company written notice of his intent to
             terminate his employment (or as of such later date as Executive shall specify in
             such notice).

                           (e) Payments and Benefits Upon Certain Terminations.

                                (i) In the event of the termination of Executive's employment
                    for any reason (including a voluntary termination of employment by
                    Executive which is not a Termination for Good Reason), Executive shall be
                    entitled to any Earned Compensation owed to Executive but not yet paid and
                    the Vested Benefits.

                                (ii) Except as provided in Section 8(e)(iii), in the event the
                    Employment Period ends by reason of a Termination Without Cause or a
                    Termination for Good Reason, Executive shall receive the Basic Payment.

                                                      10



                                (iii) In lieu of the Basic Payment, in the event the
                    Employment Period ends by reason of a Termination Without Cause or a
                    Termination for Good Reason within the 24 month period immediately
                    following a Change of Control, Executive shall receive the Special
                    Payment.

                                (iv) In the event that Executive's employment terminates (A)
                    due to his death, a Termination due to Disability or a Termination due to
                    Retirement, in any such case, after the Registration Date, or (B) due to a
                    Termination Without Cause or a Termination for Good Reason, in either
                    case, after the Registration Date and at a time at which Sam Reed is not
                    acting in the capacity of the Company's Chief Executive Officer, (x) any
                    portion of the Option that has not become vested and exercisable prior to
                    such termination of employment shall become vested and exercisable and, to
                    the extent not earlier exercised, the Option shall remain exercisable
                    until the second anniversary of such termination or, if earlier, the
                    expiration of its term, and (y) any Basic Restricted Shares and
                    Supplemental Restricted Shares outstanding on such date of termination
                    shall continue to vest, if at all, in accordance with their terms on the
                    same terms and conditions that would have applied if Executive's
                    employment hereunder had not been terminated.

                                (v) In the event that Executive's employment terminates due to
                    a Termination Without Cause or a Termination for Good Reason, in either
                    case, after the Registration Date and while Sam Reed is acting in the
                    capacity of the Company's Chief Executive Officer, (A) in addition to any
                    portion of the Option that at such time is vested and exercisable in the

Source: DEAN FOODS CO, 10-K, March 16, 2005
                    ordinary course, upon such termination, the following additional portion
                    of the Option shall become vested and exercisable: (x) the portion of the
                    Option, if any, that would have become vested and exercisable on the next
                    following anniversary of the Option grant date had Executive continued to
                    have been employed plus (y) the portion of the Option, if any, that would
                    become vested on the second following anniversary of the Option grant date
                    had Executive continued to have been employed times a fraction (the
                    "PRO-RATION FRACTION"), the numerator of which is the number of days
                    Executive was employed since the last anniversary of such grant date
                    through (and including) the termination date and the denominator of which
                    is 365, and (B) any portion of the Option that is vested and exercisable
                    on the termination date (including the portion thereof that vests and
                    becomes exercisable on such date pursuant to subclause (A)) shall be and
                    remain exercisable (unless earlier exercised) until the second anniversary
                    of the termination date.

                                (vi) In the event that Executive's employment terminates due
                    to a Termination Without Cause or a Termination for Good Reason, in either
                    case, after the Registration Date and while Sam Reed is acting in the
                    capacity of the Company's Chief Executive Officer, in addition to any
                    portion thereof that became vested in the ordinary course prior to the
                    date of such termination, the following additional portion of the Basic
                    Restricted Shares and Supplemental Restricted Share

                                                     11



                    Units may continue to vest in accordance with its terms on the same basis
                    as would have applied had Executive's employment not terminated: (x) any
                    portion of the Basic Restricted Share award and the Supplemental
                    Restricted Share Units award that had not become vested as of the
                    termination date solely because the performance criteria applicable
                    thereto had not yet been satisfied (i.e., any portion thereof as to which
                    the service requirements has been satisfied at the date Executive's
                    employment terminated), (y) the portion of each such award that could
                    become vested on the next following anniversary of the date on which it
                    was granted had Executive continued to have been employed and (z) the
                    portion of each such award, if any, that could become vested on the second
                    following anniversary of the grant date of such award had Executive
                    continued to have been employed, multiplied by the Pro-Ration Fraction.

                                (vii) In the event of a Termination due to Disability, a
                    Termination Without Cause or a Termination for Good Reason, Executive
                    shall be entitled to continued participation in all medical, dental,
                    hospitalization and life insurance coverage and in other employee benefit
                    plans or programs in which he was participating on the date of the
                    termination of his employment until the earlier of (A) the second
                    anniversary (or, in the event Executive receives the Special Payment, the
                    third anniversary) of his termination of employment and (B) the date, or
                    dates, he receives equivalent coverage and benefits under the plans and
                    programs of a subsequent employer (such coverages and benefits to be
                    determined on a coverage-by-coverage, or benefit-by-benefit basis);
                    provided that if Executive is precluded from continuing his participation
                    in any employee plan or program as provided in this Section 8(e)(iv), he
                    shall be provided with the economic equivalent of the benefits provided
                    under the plan or program in which he is unable to participate.

                                (viii) Certain Definitions. For purposes of this Section 8,
                    capitalized terms have the following meanings.

                         "BASIC PAYMENT" means an amount equal to two times the sum of (a)
             the annual Base Salary payable to Executive immediately prior to the end of the
             Employment Period (or in the event a reduction in Base Salary is the basis for a
             Termination for Good Reason, then the Base Salary in effect immediately prior to
             such reduction) and (b) the Target Incentive Compensation for the calendar year
             in which the Employment Period ends pursuant to Section 8(a).

                         "CHANGE OF CONTROL" means the occurrence of any of the following
             events following the date of distribution of the Common Stock to the
             stockholders of Dean in connection with the Spin-Off: (a) any "person" (as such
             term is used in Section 13(d) of the Exchange Act, but specifically excluding
             the Company, any wholly-owned subsidiary of the Company and/or any employee
             benefit plan maintained by the Company or any wholly-owned subsidiary of the
             Company) becomes the "beneficial owner" (as determined pursuant to Rule 13d-3
             under the Exchange Act), directly or indirectly, of

                                                     12




Source: DEAN FOODS CO, 10-K, March 16, 2005
             securities of the Company representing thirty percent (30%) or more of the
             combined voting power of the Company's then outstanding securities; or (b)
             individuals who currently serve on the Board, or whose election to the Board or
             nomination for election to the Board was approved by a vote of at least
             two-thirds (2/3) of the directors who either currently serve on the Board, or
             whose election or nomination for election was previously so approved, cease for
             any reason to constitute a majority of the Board; or (c) the Company or any
             subsidiary of the Company shall merge with or consolidate into any other
             corporation, other than a merger or consolidation which would result in the
             holders of the voting securities of the Company outstanding immediately prior
             thereto holding immediately thereafter securities representing more than sixty
             percent (60%) of the combined voting power of the voting securities of the
             Company or such surviving entity (or its ultimate parent, if applicable)
             outstanding immediately after such merger or consolidation; or (d) the
             stockholders of the Company approve a plan of complete liquidation of the
             Company or an agreement for the sale or disposition by the Company of all or
             substantially all of the Company's assets, or such a plan is commenced.

                         "DATE OF TERMINATION" means (i) if Executive's employment is
             terminated by his death, the date of his death, and (ii) if Executive's
             employment is terminated for any other reason, the date specified in a notice of
             termination delivered to Executive by the Company (or if no such date is
             specified, the date such notice is delivered).

                         "EARNED COMPENSATION" means the sum of (a) any Base Salary earned,
             but unpaid, for services rendered to the Company on or prior to the date on
             which the Employment Period ends pursuant to Section 8(a), (b) any annual
             Incentive Compensation payable for services rendered in the calendar year
             preceding the calendar year in which the Employment Period ends that has not
             been paid on or prior to the date the Employment Period ends (other than (x)
             Base Salary and (y) Incentive Compensation deferred pursuant to Executive's
             election), (c) any accrued but unused vacation days and (d) any business
             expenses incurred on or prior to the date of the Executive's termination that
             are eligible for reimbursement in accordance with the Company's expense
             reimbursement policies as then in effect.

                         "SPECIAL PAYMENT" means an amount equal to three times the sum of
             (a) the annual Base Salary payable to Executive immediately prior to the end of
             the Employment Period (or in the event a reduction in Base Salary is the basis
             for a Termination for Good Reason, then the Base Salary in effect immediately
             prior to such reduction) and (b) the Target Incentive Compensation for the
             calendar year in which the Employment Period ends pursuant to Section 8(a).

                         "TARGET INCENTIVE COMPENSATION" means with respect to any calendar
             year the annual Incentive Compensation Executive would have been entitled to
             receive under Section 4(b) for such calendar year had he remained employed by
             the Company for the entire calendar year and assuming that all targets for such
             calendar year had been met.

                                                    13



                         "VESTED BENEFITS" means amounts which are vested or which Executive
             is otherwise entitled to receive under the terms of or in accordance with any
             plan, policy, practice or program of, or any contract or agreement with, the
             Company or any of its subsidiaries, at or subsequent to the date of his
             termination without regard to the performance by Executive of further services
             or the resolution of a contingency.

                         (f) Resignation upon Termination. Effective as of any Date of
             Termination under this Section 8, Executive shall resign, in writing, from all
             positions then held by him with the Company and its affiliates.

                         (g) Timing of Payments. Earned Compensation, the Basic Payment and
             the Special Payment shall be paid in a single lump sum as soon as practicable,
             but in no event more than 15 days, following the end of the Employment Period.
             Vested Benefits shall be payable in accordance with the terms of the plan,
             policy, practice, program, contract or agreement under which such benefits have
             accrued.

                         (h) Payment Following a Change of Control. If the aggregate of all
             payments or benefits made or provided to Executive with respect to any of the
             equity compensation provided under Section 5 or Section 6, under Section
             8(e)(iii)(A), if applicable, and under all other plans and programs of the
             Company (the "AGGREGATE PAYMENT") is determined to constitute a Parachute
             Payment, as such term is defined in Section 280G(b)(2) of the Code, the Company
             shall pay to Executive, prior to the time any excise tax imposed by Section 4999
             of the Code (the "EXCISE TAX") is payable with respect to such Aggregate

Source: DEAN FOODS CO, 10-K, March 16, 2005
             Payment, an additional amount which, after the imposition of all income,
             employment and excise taxes thereon, is equal to the Excise Tax on the Aggregate
             Payment. The determination of whether the Aggregate Payment constitutes a
             Parachute Payment and, if so, the amount to be paid to Executive and the time of
             payment pursuant to this Section 8(h) shall be made by the Company's independent
             auditor or, if such independent auditor is unwilling or unable to serve in this
             capacity, such other nationally recognized accounting firm selected by the
             Company with the consent of the person serving as the Chief Executive Officer of
             the Company immediately prior to the Change of Control, which consent shall not
             be unreasonably withheld (the "AUDITOR").

                         (i) Full Discharge of Company Obligations. The amounts payable to
             Executive pursuant to this Section 8 following termination of his employment
             (including amounts payable with respect to Vested Benefits) shall be in full and
             complete satisfaction of Executive's rights under this Agreement and any other
             claims he may have in respect of his employment by the Company or any of its
             subsidiaries other than claims for common law torts or under other contracts
             between Executive and the Company or its subsidiaries. Such amounts shall
             constitute liquidated damages with respect to any and all such rights and claims
             and, upon Executive's receipt of such amounts, the Company shall be released and
             discharged from any and all liability to Executive in connection with this
             Agreement or otherwise in connection with Executive's employment with the
             Company and its subsidiaries and, as a condition to payment of any such amounts
             that are

                                                     14



             in excess of the Earned Compensation and the Vested Benefits, following the Date
             of Termination and if requested by the Company, Executive shall execute a
             release in favor of the Company in the form approved by the Company.

                         (j) No Mitigation; No Offset. In the event of any termination of
             employment under this Section 8, Executive shall be under no obligation to seek
             other employment and there shall be no offset against amounts due Executive
             under this Agreement on account of any remuneration attributable to any
             subsequent employment that he may obtain except as specifically provided with
             regard to the continuation of benefits in Section 8(e)(v).

                    9. Noncompetition and Confidentiality.

                          (a) Noncompetition. During the Employment Period and, in the event
             that Executive's employment is terminated for any reason other than death, a
             Termination Without Cause or a Termination for Good Reason, for a period of 12
             months following the Date of Termination (the "POST-TERMINATION PERIOD"),
             Executive shall not become associated with any entity, whether as a principal,
             partner, employee, consultant or shareholder (other than as a holder of not in
             excess of 1% of the outstanding voting shares of any publicly traded company),
             that is actively engaged in any geographic area in any business which is in
             competition with a business conducted by the Company at the time of the alleged
             competition and, in the case of the Post-Termination Period, at the Date of
             Termination.

                         (b) Confidentiality. Without the prior written consent of the
             Company, except (i) in the course of carrying out his duties hereunder or (ii)
             to the extent required by an order of a court having competent jurisdiction or
             under subpoena from an appropriate government agency, Executive shall not
             disclose any trade secrets, customer lists, drawings, designs, information
             regarding product development, marketing plans, sales plans, manufacturing
             plans, management organization information (including data and other information
             relating to members of the Board and management), operating policies or manuals,
             business plans, financial records, packaging design or other financial,
             commercial, business or technical information relating to the Company or any of
             its subsidiaries or information designated as confidential or proprietary that
             the Company or any of its subsidiaries may receive belonging to suppliers,
             customers or others who do business with the Company or any of its subsidiaries
             (collectively, "CONFIDENTIAL INFORMATION") to any third person unless such
             Confidential Information has been previously disclosed to the public by the
             Company or has otherwise become available to the public (other than by reason of
             Executive's breach of this Section 9(b)).

                         (c) Company Property. Promptly following termination of Executive's
             employment, Executive shall return to the Company all property of the Company,
             and all copies thereof in Executive's possession or under his control, except
             that Executive may retain his personal notes, diaries, Rolodexes, calendars and
             correspondence.

                                                     15


Source: DEAN FOODS CO, 10-K, March 16, 2005
                         (d) Non-Solicitation of Employees. During the Employment Period and
             during the one year period following any termination of Executive's employment
             for any reason, Executive shall not, except in the course of carrying out his
             duties hereunder, directly or indirectly induce any employee of the Company or
             any of its subsidiaries to terminate employment with such entity, and shall not
             directly or indirectly, either individually or as owner, agent, employee,
             consultant or otherwise, knowingly employ or offer employment to any person who
             is or was employed by the Company or a subsidiary thereof unless such person
             shall have ceased to be employed by such entity for a period of at least 6
             months.

                         (e) Injunctive Relief with Respect to Covenants. Executive
             acknowledges and agrees that the covenants and obligations of Executive with
             respect to noncompetition, nonsolicitation, confidentiality and Company property
             relate to special, unique and extraordinary matters and that a violation of any
             of the terms of such covenants and obligations may cause the Company irreparable
             injury for which adequate remedies are not available at law. Therefore,
             Executive agrees that the Company shall be entitled to an injunction,
             restraining order or such other equitable relief restraining Executive from
             committing any violation of the covenants and obligations contained in this
             Section 9. These injunctive remedies are cumulative and are in addition to any
             other rights and remedies the Company may have at law or in equity.

                    10. Miscellaneous.

                         (a) Survival. Sections 7(d) (relating to the Company's obligation to
             indemnify Executive), 8 (relating to early termination), 9 (relating to
             noncompetition, nonsolicitation and confidentiality) and 10(o) (relating to
             governing law) shall survive the termination hereof, whether such termination
             shall be by expiration of the Employment Period or an early termination pursuant
             to Section 8 hereof.

                         (b) Binding Effect. This Agreement shall be binding on, and shall
             inure to the benefit of, the Company and any person or entity that succeeds to
             the interest of the Company (regardless of whether such succession does or does
             not occur by operation of law) by reason of a merger, consolidation or
             reorganization involving the Company or a sale of all or substantially all of
             the assets of the Company, provided that the assignee or transferee is the
             successor to all or substantially all of the assets of the Company and such
             assignee or transferee assumes the liabilities, obligations and duties of the
             Company, as contained in this Agreement, either contractually or as a matter of
             law. The Company further agrees that, in the event of a sale of assets as
             described in the preceding sentence, it shall use its reasonable best efforts to
             cause such assignee or transferee to expressly assume the liabilities,
             obligations and duties of the Company hereunder. This Agreement shall also inure
             to the benefit of Executive's heirs, executors, administrators and legal
             representatives and beneficiaries as provided in Section 10(d).

                                                    16



                         (c) Assignment. Except as provided under Section 10(b), neither this
             Agreement nor any of the rights or obligations hereunder shall be assigned or
             delegated by any party hereto without the prior written consent of the other
             party.

                         (d) Beneficiaries/References. Executive shall be entitled, to the
             extent permitted under any applicable law and the terms of any applicable plan,
             to select and change a beneficiary or beneficiaries to receive any compensation
             or benefit payable hereunder following Executive's death by giving the Company
             written notice thereof. In the event of Executive's death or a judicial
             determination of his incompetence, reference in this Agreement to Executive
             shall be deemed, where appropriate, to refer to his beneficiary, estate or other
             legal representative.

                         (e) Resolution of Disputes. Any disputes arising under or in
             connection with this Agreement shall, at the election of Executive or the
             Company, be resolved by binding arbitration, to be held in Chicago, Illinois in
             accordance with the rules and procedures of the American Arbitration
             Association. Judgment upon the award rendered by the arbitrator(s) may be
             entered in any court having jurisdiction thereof. Costs of the arbitration shall
             be borne by the Company. Unless the arbitrator determines that Executive did not
             have a reasonable basis for asserting his position with respect to the dispute
             in question, the Company shall also reimburse Executive for his reasonable
             attorneys' fees incurred with respect to any arbitration. Pending the resolution
             of any arbitration or court proceeding, the Company shall continue payment of
             all amounts due Executive under this Agreement and all benefits to which

Source: DEAN FOODS CO, 10-K, March 16, 2005
             Executive is entitled at the time the dispute arises (other than the amounts
             which are the subject of such dispute).

                         (f) Entire Agreement. This Agreement constitutes the entire
             agreement between the parties hereto with respect to the matters referred to
             herein. No amendment to this Agreement shall be binding between the parties
             unless it is in writing and signed by the party against whom enforcement is
             sought. There are no promises, representations, inducements or statements
             between the parties other than those that are expressly contained herein.
             Executive acknowledges that he is entering into this Agreement of his own free
             will and accord, and with no duress, that he has been represented and fully
             advised by competent counsel in entering into this Agreement, that he has read
             this Agreement and that he understands it and its legal consequences.

                         (g) Representations. Executive represents that his employment
             hereunder and compliance by him with the terms and conditions of this Agreement
             will not conflict with or result in the breach of any agreement to which he is a
             party or by which he may be bound. The Company is a corporation duly organized,
             validly existing and in good standing under the laws of the State of Delaware.
             The Company has the full corporate power and authority to execute and deliver
             this Agreement. The Company has taken all action required by law, the
             Certificate of Incorporation, its By-Laws or otherwise required to be taken by
             it to authorize the execution, delivery and performance by it of

                                                         17



             this Agreement. This Agreement is a valid and binding obligation of the Company,
             enforceable against the Company in accordance with its terms.

                         (h) Severability; Reformation. In the event that one or more of the
             provisions of this Agreement shall become invalid, illegal or unenforceable in
             any respect, the validity, legality and enforceability of the remaining
             provisions contained herein shall not be affected thereby. In the event any of
             Section 9(a), (b) or (d) is not enforceable in accordance with its terms,
             Executive and the Company agree that such Section shall be reformed to make such
             Section enforceable in a manner which provides the Company the maximum rights
             permitted at law.

                         (i) Waiver. Waiver by any party hereto of any breach or default by
             the other party of any of the terms of this Agreement shall not operate as a
             waiver of any other breach or default, whether similar to or different from the
             breach or default waived. No waiver of any provision of this Agreement shall be
             implied from any course of dealing between the parties hereto or from any
             failure by either party hereto to assert its or his rights hereunder on any
             occasion or series of occasions.

                         (j) Notices. Any notice required or desired to be delivered under
             this Agreement shall be in writing and shall be delivered personally, by courier
             service, by registered mail, return receipt requested, or by telecopy and shall
             be effective upon actual receipt when delivered or sent by telecopy and upon
             mailing when sent by registered mail, and shall be addressed as follows (or to
             such other address as the party entitled to notice shall hereafter designate in
             accordance with the terms hereof):

                           If to the Company:

                                   857-897 School Place
                                   P.O. Box 19057
                                   Green Bay, Wisconsin 54307
                                   Attention: General Counsel
                                   Telecopy No.: (920) 497-4604

                                   prior to the Registration Date, with a copy to:

                                   Dean Foods Company
                                   2515 McKinney Avenue
                                   Suite 1200
                                   Dallas, Texas 75201
                                   Attention: General Counsel
                                   Telecopy No.: (214) 303-3413

                           If to Executive:

                                   2023 Oakland Avenue

                                                         18




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                   Piedmont, CA      94611

                                   with a copy to:

                                   Vedder, Price, Kaufman & Kammholz, P.C.
                                   222 N. LaSalle Street
                                   Chicago, Illinois 60601
                                   Attention: Robert J. Stucker, Esq.
                                              Thomas P. Desmond, Esq.

                         (k) Amendments. This Agreement may not be altered, modified or
             amended except by a written instrument signed by each of the parties hereto.

                         (l) Headings. Headings to Sections in this Agreement are for the
             convenience of the parties only and are not intended to be part of or to affect
             the meaning or interpretation hereof.

                         (m) Counterparts. This Agreement may be executed in counterparts,
             each of which shall be deemed an original but all of which together shall
             constitute one and the same instrument.

                         (n) Withholding. Any payments provided for herein shall be reduced
             by any amounts required to be withheld by the Company from time to time under
             applicable federal, state or local income or employment tax laws or similar
             statutes or other provisions of law then in effect.

                         (o) Governing Law. This Agreement shall be governed by the laws of
             the State of Delaware, without reference to principles of conflicts or choice of
             law under which the law of any other jurisdiction would apply.

                                              -- Signature page follows --

                                                             19



                   IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
             by its duly authorized officer and Executive has hereunto set his hand as of the
             day and year first above written.

                                                                  DEAN SPECIALTY FOODS
                                                                     HOLDINGS, INC.

                                                                   By:_______________________
                                                                      Name:
                                                                      Title:

                                                                   EXECUTIVE:

                                                                   ___________________________
                                                                   E. Nichol McCully

                                                             20



                                                                                            Schedule A

             On each of January 31, 2006, January 31, 2007 and January 31, 2008, fifty
             percent (50%), twenty-five percent (25%) and twenty-five percent (25%),
             respectively, of the Basic Restricted Shares shall vest, provided that the
             Company's Total Shareholder Return for the period commencing on the fourth
             trading day following the Registration Date (the "COMMENCEMENT DATE") and ending
             on such January 31st equals or exceeds the median of the Total Shareholder
             Return for such period for the companies in the Selected Peer Group (as defined
             below).

             In addition, on each of January 31, 2007, January 31, 2008, January 31, 2009 and
             January 31, 2010, any Basic Restricted Shares that could have vested, but that
             did not vest, on any preceding January 31st shall vest on such subsequent date
             if the Company's Total Shareholder Return for the period from the Commencement
             Date through the applicable January 31st shall equal or exceed the median of the
             Total Shareholder Return for such period for the companies in the Selected Peer
             Group.

             As used herein, "TOTAL SHAREHOLDER RETURN" shall mean the percentage return
             received by all shareholders of the relevant company during the applicable
             measurement period, including stock price appreciation and dividends, and shall
             be calculated as follows:

Source: DEAN FOODS CO, 10-K, March 16, 2005
              Ending Stock Price (1) - Beginning Stock Price (2) + Dividend Reinvestment (3)
              ------------------------------------------------------------------------------
                                        Beginning Stock Price (2)

                    (1)    With respect to each of the Company and each company in the Selected
                           Peer Group, the average of the closing prices of its common stock
                           for the 20 consecutive trading day period ending on the applicable
                           January 31st (or if the applicable January 31 is not a trading date,
                           the immediately preceding trading date).

                    (2)    With respect to each of the Company and each company in the Selected
                           Peer Group, the average of the closing prices of its common stock on
                           the Registration Date and each of the four consecutive trading days
                           immediately following the Registration Date.

                    (3)    Assumes any dividends paid on the common stock of the Company or any
                           company in the Selected Peer Group are used to purchase its common
                           stock at the closing stock price on the date that such dividends are
                           payable, and includes the value of such additional shares of such
                           common stock (based on the Ending Stock Price for such common
                           stock).

                                                      21



             As used herein, "SELECTED PEER GROUP" shall mean 20 or more companies selected
             by the Board of Directors of the Company (or any authorized committee thereof)
             from among packaged food companies whose securities are registered to trade on a
             U.S. national securities exchange or automated quotation system (including, but
             not limited to NASDAQ) (the "PEER COMPANIES") on or as soon as practicable after
             the Registration Date; provided that in no event shall any Ineligible Company be
             selected to be a member of the Selected Peer Group. An "INELIGIBLE COMPANY"
             shall mean any Peer Company (i) in which significant portion of its voting
             securities is held by another corporate entity (other than an open-ended
             investment company); (ii) has filed for protection under the Federal bankruptcy
             law or any similar law, (iii) which is not organized, based and majority-owned
             in the United States, (iv) is party to any agreement the consummation of which
             would cause such Peer Company to cease to be publicly traded (or be described in
             subclause (i) or (iii)), or (v) which has announced an intention to be sold or
             cease to be publicly traded or to take actions which would cause it to be
             described in subclause (i) or (iii). To the extent that any Peer Company
             initially selected as part of the Selected Peer Group with respect to a
             measurement period shall become an Ineligible Company prior to the end of such
             period, such company shall be excluded from the Selected Peer Group for such
             period. The Selected Peer Group will be reviewed annually to determine whether
             any of its members shall have become Ineligible Companies.

                                                      22




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                EXHIBIT 10.16

                                              EMPLOYMENT AGREEMENT

                         EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of January 27,
             2005, by and between Dean Specialty Foods Holdings, Inc., a Delaware corporation
             (the "COMPANY"), and Thomas E. O'Neill (the "EXECUTIVE").

                                              W I T N E S S E T H:

                   WHEREAS, the Company's parent corporation, Dean Foods Company ("DEAN"),
             intends, subject to certain conditions, to distribute the common stock, par
             value $.01 per share, of the Company (the "COMMON STOCK") owned by Dean to its
             shareholders, whereby the Company would become a stand-alone publicly traded
             corporation;

                   WHEREAS, Executive is willing to enter into this Agreement in anticipation
             of the Company becoming a stand-alone publicly traded corporation through the
             distribution of the Common Stock to Dean's shareholders;

                   WHEREAS, to effect such a spin-off and to position the Company to maximize
             its value for Dean's shareholders, it is necessary that the Company have a
             strong and experienced management team with a proven track record in developing
             and growing a company in the consumer packaged goods industry;

                   WHEREAS, Executive is one of several members of a management team (the
             "TEAM") that possesses the skills and experience necessary to undertake the
             challenges of developing the Company, including through acquisitions;

                   WHEREAS, in light of these skills and experience, the Company desires to
             secure the services of Executive and the other members of the Team, and is
             willing to enter into this Agreement embodying the terms of the employment of
             Executive by the Company, which terms include one or more substantial
             equity-based compensation awards; and

                   WHEREAS, Executive is willing to accept such employment and enter into
             such Agreement, subject to Dean making available to Executive and to the other
             members of the Team the opportunity to invest in the common stock of the Company
             and making the undertakings regarding the governance and management of the
             Company set forth in the in the stockholders agreement (the "STOCKHOLDERS
             AGREEMENT") to be entered into by the Company, Dean, Executive, other members of
             the Team, and certain other investors who are affiliates of the Team
             contemporaneously with this Agreement; and

                   WHEREAS, in order to give Executive and the Team the opportunity to
             acquire an equity interest in the Company and as an incentive for Executive to
             participate in the affairs of the Company, the Company is willing to sell to
             Executive, and Executive

                                                        1


             desires to purchase, shares of common stock (the "COMMON STOCK"), subject to the
             terms and conditions set forth in the Subscription Agreement (the "SUBSCRIPTION
             AGREEMENT") to be entered into contemporaneously with this Agreement and in the
             Stockholders Agreement.

                   NOW, THEREFORE, in consideration of the mutual covenants herein contained,
             the Company and Executive hereby agree as follows:

                   1. Employment. Upon the terms and subject to the conditions of this
             Agreement and, unless earlier terminated as provided in Section 8, the Company
             hereby employs Executive and Executive hereby accepts employment by the Company
             for the period (i) commencing on the date hereof (the "COMMENCEMENT DATE") and
             (ii) ending on the third anniversary of (A) the Commencement Date or, (B) if the
             Common Stock shall become registered under Section 12(g) of the Securities
             Exchange Act of 1934, as amended (the "EXCHANGE ACT"), during the term hereof,
             the third anniversary of the date such registration shall have become effective
             and trading of Common Stock on a registered national securities exchange or
             automated quotation system (including, but not limited to, NASDAQ) shall have
             commenced (the "REGISTRATION DATE"); provided, however, that the term of this
             Agreement shall automatically be extended for one additional year on the third
             anniversary of the Registration Date and each subsequent anniversary thereof
             unless not less than 90 days prior to such anniversary date either party shall
             give the other written notice that he or it does not want the term to extend as
             of such anniversary date. The period during which Executive is employed pursuant
             to this Agreement (including pursuant to any extension of the term hereof
             pursuant to the proviso in the immediately preceding sentence) shall be referred

Source: DEAN FOODS CO, 10-K, March 16, 2005
             to herein as the "EMPLOYMENT PERIOD."

                   2. Position and Duties. During the Employment Period, Executive shall
             serve as the Senior Vice President, General Counsel and Chief Administrative
             Officer of the Company and in such other position or positions with the Company
             and its majority-owned subsidiaries consistent with the foregoing position as
             the Board of Directors of the Company (the "BOARD") may specify or the Company
             and Executive may mutually agree upon from time to time. During the Employment
             Period, Executive shall have the duties, responsibilities and obligations
             customarily assigned to individuals at comparable publicly traded companies
             serving in the position or positions in which Executive serves hereunder.
             Executive shall devote substantially all his business time to the services
             required of him hereunder, except for vacation time and reasonable periods of
             absence due to sickness, personal injury or other disability, and shall perform
             such services to the best of his abilities. Subject to the provisions of Section
             9, nothing herein shall preclude Executive from (i) engaging in charitable
             activities and community affairs, (ii) managing his personal investments and
             affairs or (iii) serving on the board of directors or other governing body of
             any corporate or other business entity, so long as such service is not in
             violation of the covenants contained in Section 9 or the governance principles
             established for the Company by the Board, as in effect from time to time,
             provided that in no event

                                                     2


             may such activities, either individually or in the aggregate, materially
             interfere with the proper performance of Executive's duties and responsibilities
             hereunder.

                   3. Place of Performance. The Company shall establish its headquarters
             office in Chicago, Illinois metropolitan area at which Executive shall have his
             principal office. Executive shall also have an office, and perform services at,
             the Company's offices in Green Bay, Wisconsin, on such basis as Executive deems
             necessary or appropriate for the performance of his duties.

                    4. Compensation.

                         (a) Base Salary. During the Employment Period, the Company shall pay
             Executive a base salary at the annual rate of $350,000. Beginning in 2006, the
             Board shall review Executive's base salary no less frequently than annually and
             may increase such base salary in its discretion. The amount of annual base
             salary payable under this Section 4(a) shall be reduced, however, to the extent
             Executive elects to defer such salary under the terms of any deferred
             compensation or savings plan or arrangement maintained or established by the
             Company or any of its subsidiaries. Executive's annual base salary payable
             hereunder, including any increased annual base salary, without reduction for any
             amounts deferred as described above, is referred to herein as "BASE SALARY". The
             Company shall pay Executive the portion of his Base Salary not deferred in
             accordance with its standard payroll practices, but no less frequently than in
             equal monthly installments.

                         (b) Incentive Compensation. For each full calendar year during the
             Employment Period, Executive shall be eligible to receive an annual incentive
             bonus from the Company, with a target bonus opportunity of not less than 60% of
             his Base Salary, which will be payable, if at all, upon the achievement by
             Executive and/or the Company of performance objectives to be established by the
             Board in consultation with the Company's Chief Executive Officer and
             communicated to Executive during the first quarter of such year (the "INCENTIVE
             COMPENSATION"). Without limiting the generality of the foregoing, the actual
             amount payable to Executive in respect of the Incentive Compensation may be more
             or less than the targeted opportunity (including zero) based on the actual
             results against the pre-established performance objectives.

                   5. Stock Purchase. Substantially contemporaneously with the Commencement
             Date, Executive shall purchase the number of shares of Common Stock of the
             Company specified in the Subscription Agreement related to the purchase of such
             shares, to be entered into by Executive and the Company (the "SUBSCRIPTION
             Agreement"). The terms and conditions of such purchase shall be as set forth in
             the Subscription Agreement, and such shares shall be subject to the limitations
             and restrictions, including, without limitation, the restrictions on transfer
             and the put and call rights set forth in the Stockholders Agreement.

                                                     3


                    6. Public Equity Awards.

                         (a) Basic Restricted Stock Grant. On the fourth trading day
             following the Registration Date, the Company shall grant Executive an award of

Source: DEAN FOODS CO, 10-K, March 16, 2005
             that number of whole restricted shares of Common Stock (the "BASIC RESTRICTED
             SHARES") as is equal to (or most closely approximates) 0.30% of the Outstanding
             Common Stock on the date of grant. The Basic Restricted Shares shall vest and
             become freely transferable in the proportions, and based upon achievement of the
             total shareholder return objectives, determined pursuant to Schedule A hereto,
             so long as Executive is continuously employed by the Company through the
             applicable vesting date. Any Basic Restricted Shares that have not become vested
             and freely transferable on or before the fifth anniversary of the grant date
             shall be forfeited. For purposes of this Agreement, "OUTSTANDING COMMON STOCK"
             shall mean the sum of (x) the number of shares Common Stock that are issued and
             outstanding on the Registration Date and (y) the number of shares of Common
             Stock issuable pursuant to any stock options granted by Dean prior to the
             Registration Date in respect of its common stock and converted into the right to
             purchase Common Stock in connection with or in contemplation of the Spin-Off.

                         (b) Supplemental Restricted Stock Unit Grant. On the fourth trading
             day following the Registration Date, Executive shall be granted, automatically
             and without any further action on the part of the Company or the Board, an award
             of restricted stock units, with each such unit representing a right to receive
             one share of Common Stock on the terms and conditions set forth herein (the
             "SUPPLEMENTAL RESTRICTED SHARE UNITS"). The number of Supplemental Restricted
             Share Units subject to such grant shall be equal to the quotient (rounded up to
             the nearest whole number) obtained by dividing (x) by (y), where (x) and (y)
             are:

                           (x)    the product of (i) the excess, if any, of (A) the Initial Fair
                                  Market Value over (B) the Adjusted Per Share Purchase Price
                                  and (ii) that number of whole shares of Common Stock as is
                                  equal to (or most closely approximates) 0.90% of the
                                  Outstanding Common Stock on the date of grant; and

                           (y)    the Initial Fair Market Value.

                   For purposes of this Agreement, "INITIAL FAIR MARKET VALUE" shall mean the
             average of the closing values on the Registration Date and on each of the next
             four trading days immediately following the Registration Date, as reported on
             the principal exchange or automated quotation system on which the Common Stock
             is traded or reported. "ADJUSTED PER SHARE PURCHASE PRICE" shall mean the $5,000
             purchase price per share of Common Stock, appropriately adjusted to reflect any
             stock split or share combination involving the Common Stock, any
             recapitalization of the Company, any adjustment pursuant to Section 4.3(b) of
             the Stockholders Agreement, or any merger, consolidation, reorganization or
             similar corporate event involving the Company occurring

                                                        4


             on or after the Commencement Date and on or before the Registration Date.

                   The Supplemental Restricted Share Units shall vest in three equal annual
             installments on the first three anniversaries of the Registration Date, so long
             as (with respect to each installment) Executive is continuously employed by the
             Company through the applicable anniversary date. Notwithstanding the foregoing,
             no Supplemental Restricted Share Units shall become vested on any such
             anniversary date if, on such date, the average of the closing prices of a share
             of Common Stock on the principal trading market on which such shares are traded
             or reported for the 20 trading day period ended on such date (or, if such date
             is not a business day, the 20 trading day period ended on the last trading day
             occurring immediately prior thereto) does not exceed the Initial Fair Market
             Value (the "MINIMUM VALUE REQUIREMENT"). In the event that the Minimum Value
             Requirement is not satisfied on any applicable anniversary date, the
             Supplemental Restricted Share Units that would otherwise have vested on such
             anniversary date shall vest on any subsequent anniversary date or on any date
             after the third anniversary date (treating each such date as an anniversary date
             for purposes of the 20 day trading measurement period) on which both Executive
             is still an employee of the Company and the Minimum Value Requirement is
             satisfied; provided that any such Supplemental Restricted Share Units that have
             not become vested on or before the fifth anniversary of the grant date shall be
             forfeited. The shares of Common Stock corresponding to any vested Supplemental
             Restricted Share Units, if any, shall be distributed to Executive as soon as
             practicable, but not later than five (5) business days following the earlier to
             occur of (i) the fifth anniversary of the date of grant or (ii) the sixth month
             anniversary of the date Executive's employment with the Company terminates,
             unless the Executive elects (in a manner consistent with the applicable
             requirements of Section 409A of the Internal Revenue Code (the "CODE")) to defer
             the date upon which the shares of Common Stock corresponding to the vested
             Supplement Restricted Share Units shall be distributed.

                         (c) Stock Option. On the fourth trading day following the
             Registration Date, the Company shall automatically and without any further

Source: DEAN FOODS CO, 10-K, March 16, 2005
             action on the part of the Company or the Board grant to Executive a
             non-qualified stock option to purchase the number of shares of Common Stock
             equal to the remainder of (i) the number of whole shares of Common Stock
             specified in Section 6(b)(x)(ii) minus (ii) the number of Supplemental
             Restricted Share Units awarded pursuant to Section 6(b) (the "OPTION"). The
             exercise price per share with respect to the Option shall be equal to the
             Initial Fair Market Value. The Option shall become vested and exercisable in
             three approximately equal annual installments on each of the first three
             anniversaries of the grant date of such Option, so long as Executive is
             continuously employed by the Company through the applicable anniversary date.

                         (d) Stock Incentive Plan. Each of the Basic Restricted Shares, the
             Supplemental Restricted Shares and the Option shall be granted pursuant to a
             stock incentive plan (the "INCENTIVE PLAN") to be adopted by the Company prior
             to the Registration Date that will authorize for issuance thereunder at least
             (i) 13% of the

                                                     5


             Outstanding Common Stock plus (ii) the number of shares of Common Stock issuable
             pursuant to any stock options granted by Dean prior to the Registration Date in
             respect of its common stock and converted into the right to purchase Common
             Stock in connection with or in contemplation of the Spin-Off as provided in the
             Stockholders Agreement. Such Incentive Plan shall have terms and conditions
             which will permit the issuance of the awards to the Executive specified in this
             Section 6 and shall not contain any other term or condition that has an adverse
             effect on any award to be made to Executive pursuant to this Section 6.

                         (e) Award Agreements. Each of the Basic Restricted Shares,
             Supplemental Restricted Shares and the Option shall be subject to an award
             agreement having the terms and conditions specified in the preceding
             subparagraphs of this Section 6 and otherwise consistent with the terms and
             conditions of the Incentive Plan. Each such agreement shall provide for full
             vesting of such awards upon a Change of Control and shall provide that Executive
             shall have the right to elect that any applicable tax withholding requirements
             with respect to the vesting, exercise or distribution of Common Stock be
             satisfied by having the Company withhold shares of Common Stock subject to such
             award having a value equal to the minimum required applicable tax withholding,
             and that Executive may exercise the Option using previously owned shares of
             Common Stock, including Basic Restricted Shares that are still subject to
             forfeiture, provided that that number of shares deliverable upon exercise of the
             Option that corresponds to the number of unvested Basic Restricted Shares
             surrendered will be subject to the same forfeiture provisions and restrictions
             on transfer as the Basic Restricted Shares surrendered to exercise such Option,
             in whole or in part.

                         (f) Capital Adjustments. Notwithstanding anything to the contrary
             contained in Section 5 or this Section 6, the exercise price of, and the number
             of Shares subject to, the Option, the number of Units subject to the
             Supplemental Restricted Share Units, and the Minimum Value Requirement shall be
             appropriately adjusted, by the Board in its sole discretion, to reflect any
             extraordinary dividend, any dividend payable in shares of capital stock, any
             stock split or share combination involving the Common Stock, any
             recapitalization of the Company, any merger, consolidation, reorganization or
             similar corporate event involving the Company occurring after the Registration
             Date.

                         (g) Impact on Future Grants. Unless following the Registration Date
             the Board shall determine that special circumstances warrant the grant of such
             additional awards as it or any duly authorized committee thereof shall, in its
             sole discretion, determine, it is the intent and expectation of the parties that
             Executive will not receive any further grants of equity-based compensation prior
             to the third anniversary of the Commencement Date. Following such third
             anniversary, Executive shall be eligible to receive equity-based compensation
             awards in accordance the Company's generally applicable compensation practices,
             as then in effect.

                                                      6


                    7. Benefits, Perquisites and Expenses.

                         (a) Benefits. During the Employment Period, Executive shall be
             eligible to participate in (i) each welfare benefit plan sponsored or maintained
             by the Company for its senior executive officers, including, without limitation,
             each group life, hospitalization, medical, dental, health, accident or
             disability insurance or similar plan or program of the Company, and (ii) each
             pension, profit sharing, retirement, deferred compensation or savings plan
             sponsored or maintained by the Company for its senior executive officers, in

Source: DEAN FOODS CO, 10-K, March 16, 2005
             each case, whether now existing or established hereafter, in accordance with the
             generally applicable provisions thereof, as the same may be amended from time to
             time.

                         (b) Perquisites. During the Employment Period, Executive shall be
             entitled to receive such perquisites as are generally provided to other senior
             executive officers of the Company in accordance with the then current policies
             and practices of the Company.

                         (c) Business Expenses. During the Employment Period, the Company
             shall pay or reimburse Executive for all reasonable expenses incurred or paid by
             Executive in the performance of Executive's duties hereunder, upon presentation
             of expense statements or vouchers and such other information as the Company may
             require and in accordance with the generally applicable policies and procedures
             of the Company.

                         (d) Indemnification. The Company agrees that if Executive is made a
             party, or is threatened to be made a party, to any action, suit or proceeding,
             whether civil, criminal, administrative or investigative (a "PROCEEDING"), by
             reason of the fact that he is or was a director, officer or employee of the
             Company or any subsidiary or affiliate thereof, or is or was serving at the
             request of the Company as a director, officer, member, employee or agent of
             another corporation, partnership, joint venture, trust or other enterprise,
             including, in each case, service with respect to employee benefit plans, whether
             or not the basis of such Proceeding is Executive's alleged action in an official
             capacity while serving as a director, officer, member, employee or agent,
             Executive shall be indemnified and held harmless by the Company to the fullest
             extent legally permitted or authorized by the Company's certificate of
             incorporation or by-laws or resolutions of the Board or, if greater, by the laws
             of the State of Delaware, against all cost, expense, liability and loss
             (including, without limitation, attorney's fees, judgments, fines or penalties
             and amounts paid or to be paid in settlement) reasonably incurred or suffered by
             Executive in connection therewith, and such indemnification shall continue as to
             Executive even if he has ceased to be a director, officer, member, employee or
             agent of the Company or other entity and shall inure to the benefit of
             Executive's heirs, executors and administrators. If Executive serves as a
             director, officer, member, partner, employee or agent of another corporation,
             partnership, joint venture, limited liability company, trust or other enterprise
             (including, in each case, service with respect to employee benefit plans) which
             is a subsidiary or affiliate of the Company, it shall be presumed for purposes
             of this Section 7(d) that Executive serves or served in such capacity at the
             request of the

                                                     7


             Company. The Company shall advance to Executive all reasonable costs and
             expenses incurred by him in connection with a Proceeding within 30 days after
             receipt by the Company of a written request for such advance. Such request shall
             include an undertaking by Executive to repay the amount of such advance, if it
             shall ultimately be determined that he is not entitled to be indemnified against
             such costs and expenses. The Company agrees to continue and maintain a
             directors' and officers' liability insurance policy covering Executive to the
             extent the Company provides such coverage for its other executive officers or
             directors.

                    8. Termination of Employment.

                         (a) Early Termination of the Employment Period. Notwithstanding
             Section 1, the Employment Period shall end upon the earliest to occur of (i) a
             termination of Executive's employment on account of Executive's death, (ii) a
             Termination due to Disability, (iii) a Termination for Cause, (iv) a Termination
             Without Cause, (v) a Termination for Good Reason, (vi) a Termination due to
             Retirement or (vii) a Voluntary Termination.

                         (b) Termination Due to Death or Disability. In the event that
             Executive's employment hereunder terminates due to his death or as a result of a
             Termination due to Disability (as defined below), no termination benefits shall
             be payable to or in respect of Executive except as provided in Section 8(e). For
             purposes of this Agreement, "TERMINATION DUE TO DISABILITY" means a termination
             of Executive's employment upon written notice from the Company because Executive
             has been incapable, regardless of any reasonable accommodation by the Company,
             of substantially fulfilling the positions, duties, responsibilities and
             obligations set forth in this Agreement because of physical, mental or emotional
             incapacity resulting from injury, sickness or disease for a period of more than
             (i) four consecutive months or (ii) an aggregate of six months in any twelve
             month period. Any question as to the existence or extent of Executive's
             disability upon which Executive and the Company cannot agree shall be determined
             by a qualified, independent physician jointly selected by the Company and
             Executive. If the Company and Executive cannot agree on the physician to make

Source: DEAN FOODS CO, 10-K, March 16, 2005
             the determination, then the Company and Executive shall each select a physician
             and those physicians shall jointly select a third physician, who shall make the
             determination. The determination of any such physician shall be final and
             conclusive for all purposes of this Agreement. Executive or his legal
             representative or any adult member of his immediate family shall have the right
             to present to such physician such information and arguments as to Executive's
             disability as he, she or they deem appropriate, including the opinion of
             Executive's personal physician.

                         (c) Termination by the Company. The Company may terminate
             Executive's employment with the Company with or without Cause; provided that
             prior to the Registration Date, the Company may only terminate Executive's
             employment hereunder for Cause. "TERMINATION FOR CAUSE" means a termination of
             Executive's employment

                                                     8


             by the Company due to Cause. "CAUSE" means (i) Executive's conviction of a
             felony or the entering by Executive of a plea of nolo contendere to a felony
             charge, (ii) Executive's gross neglect or willful and intentional gross
             misconduct in the performance of, or willful, substantial and continual refusal
             by Executive in breach of this Agreement to perform, the duties,
             responsibilities or obligations assigned to Executive pursuant to the terms
             hereof, (iii) a TreeHouse Default (as defined in the Stockholders Agreement),
             (iv) any material breach by Executive of Section 9 of this Agreement or (v) a
             material breach by Executive of the Code of Ethics applicable to the Company's
             employees, as in effect from time to time; provided, however, that no act or
             omission shall constitute "Cause" for purposes of this Agreement unless the
             Board provides Executive, within 90 days of the Board learning of such act or
             acts or failure or failures to act, (A) written notice of the intention to
             terminate him for Cause, which notice states in detail clearly and fully the
             particular act or acts or failure or failures to act that constitute the grounds
             on which the Board reasonably believes in good faith constitutes "Cause", and
             (B) an opportunity, within thirty (30) days following Executive's receipt of
             such notice, to meet in person with the Board to explain or defend the alleged
             act or acts or failure or failures to act relied upon by the Board and, to the
             extent such cure is possible, to cure such act or acts or failure or failures to
             act. If such conduct is cured to the reasonable satisfaction of the Board, such
             notice of termination shall be revoked. Further, no act or acts or failure or
             failures to act shall be considered "willful" or "intentional" if taken in good
             faith and Executive reasonably believed such act or acts or failure or failures
             to act were in the best interests of the Company.

                         (d) Termination by Executive. Executive may terminate his employment
             with the Company for Good Reason, for Retirement or in a Voluntary Termination.
             A "TERMINATION FOR GOOD REASON" by Executive means a termination of Executive's
             employment by Executive within 90 days following (i) a reduction in Executive's
             annual Base Salary or target Incentive Compensation opportunity, (ii) the
             failure to elect or reelect Executive to any of the positions described in
             Section 2 above or the removal of him from any such position, (iii) a material
             reduction in Executive's duties and responsibilities or the assignment to
             Executive of duties and responsibilities which are materially inconsistent with
             his duties or which materially impair Executive's ability to function in the
             position specified in Section 2, (iv) a material breach of any material
             provision of this Agreement by the Company, (v) the earlier of (x) October 31,
             2005 (or such later date as the Company and Executive (or Executive's agent
             appointed pursuant to the Stockholders Agreement) shall agree) and (y) the Early
             Termination Date (as defined in the Stockholders Agreement), if the Registration
             Date has not occurred on or before such earlier date other than as a result of a
             TreeHouse Default; (vi) any material breach by the Company or Dean of the
             Stockholders Agreement; (vii) any material breach by the Company of any of the
             award agreements referenced in Section 6(e); or (viii) the failure by the
             Company to obtain the assumption agreement referred to in Section 10(b) of this
             Agreement prior to the effectiveness of any succession referred to therein,
             unless the purchaser, successor or assignee referred to therein is bound to
             perform this Agreement by operation of law. Notwithstanding the foregoing, a

                                                     9


             termination shall not be treated as a Termination for Good Reason (i) if
             Executive shall have consented in writing to the occurrence of the event giving
             rise to the claim of Termination for Good Reason (or non-occurrence of the event
             described in clause (v) of this definition) or (ii) unless Executive shall have
             delivered a written notice to the Board within 60 days of his having actual
             knowledge of the occurrence of one of such events stating that he intends to
             terminate his employment for Good Reason and specifying the factual basis for
             such termination, and such event, if capable of being cured, shall not have been
             cured within 10 days of the receipt of such notice. A "TERMINATION DUE TO

Source: DEAN FOODS CO, 10-K, March 16, 2005
             RETIREMENT" means Executive's voluntary termination of employment after having
             (i) completed at least five (5) years of service with the Company and (ii) the
             sum of the Executive's attained age and length of service with the Company is at
             least 62 (or such lower number as the Board shall permit). A "VOLUNTARY
             TERMINATION" shall mean a termination of employment by Executive that is not a
             Termination for Good Reason, a Termination due to Retirement or a Termination
             due to Disability, and which occurs after the Registration Date and on 90th day
             after Executive shall have given the Company written notice of his intent to
             terminate his employment (or as of such later date as Executive shall specify in
             such notice).

                           (e) Payments and Benefits Upon Certain Terminations.

                                (i) In the event of the termination of Executive's employment
                    for any reason (including a voluntary termination of employment by
                    Executive which is not a Termination for Good Reason), Executive shall be
                    entitled to any Earned Compensation owed to Executive but not yet paid and
                    the Vested Benefits.

                                (ii) Except as provided in Section 8(e)(iii), in the event the
                    Employment Period ends by reason of a Termination Without Cause or a
                    Termination for Good Reason, Executive shall receive the Basic Payment.

                                (iii) In lieu of the Basic Payment, in the event the
                    Employment Period ends by reason of a Termination Without Cause or a
                    Termination for Good Reason within the 24 month period immediately
                    following a Change of Control, Executive shall receive the Special
                    Payment.

                                (iv) In the event that Executive's employment terminates (A)
                    due to his death, a Termination due to Disability or a Termination due to
                    Retirement, in any such case, after the Registration Date, or (B) due to a
                    Termination Without Cause or a Termination for Good Reason, in either
                    case, after the Registration Date and at a time at which Sam Reed is not
                    acting in the capacity of the Company's Chief Executive Officer, (x) any
                    portion of the Option that has not become vested and exercisable prior to
                    such termination of employment shall become vested and exercisable and, to
                    the extent not earlier exercised, the Option shall remain exercisable
                    until the second anniversary of such termination or, if earlier, the
                    expiration of its term, and (y) any Basic Restricted Shares and
                    Supplemental Restricted Shares outstanding on such date of termination
                    shall continue to vest, if at

                                                      10


                    all, in accordance with their terms on the same terms and conditions that
                    would have applied if Executive's employment hereunder had not been
                    terminated.

                                (v) In the event that Executive's employment terminates due to
                    a Termination Without Cause or a Termination for Good Reason, in either
                    case, after the Registration Date and while Sam Reed is acting in the
                    capacity of the Company's Chief Executive Officer, (A) in addition to any
                    portion of the Option that at such time is vested and exercisable in the
                    ordinary course, upon such termination, the following additional portion
                    of the Option shall become vested and exercisable: (x) the portion of the
                    Option, if any, that would have become vested and exercisable on the next
                    following anniversary of the Option grant date had Executive continued to
                    have been employed plus (y) the portion of the Option, if any, that would
                    become vested on the second following anniversary of the Option grant date
                    had Executive continued to have been employed times a fraction (the
                    "PRO-RATION FRACTION"), the numerator of which is the number of days
                    Executive was employed since the last anniversary of such grant date
                    through (and including) the termination date and the denominator of which
                    is 365, and (B) any portion of the Option that is vested and exercisable
                    on the termination date (including the portion thereof that vests and
                    becomes exercisable on such date pursuant to subclause (A)) shall be and
                    remain exercisable (unless earlier exercised) until the second anniversary
                    of the termination date.

                                (vi) In the event that Executive's employment terminates due
                    to a Termination Without Cause or a Termination for Good Reason, in either
                    case, after the Registration Date and while Sam Reed is acting in the
                    capacity of the Company's Chief Executive Officer, in addition to any
                    portion thereof that became vested in the ordinary course prior to the
                    date of such termination, the following additional portion of the Basic
                    Restricted Shares and Supplemental Restricted Share Units may continue to
                    vest in accordance with its terms on the same basis as would have applied
                    had Executive's employment not terminated: (x) any portion of the Basic

Source: DEAN FOODS CO, 10-K, March 16, 2005
                    Restricted Share award and the Supplemental Restricted Share Units award
                    that had not become vested as of the termination date solely because the
                    performance criteria applicable thereto had not yet been satisfied (i.e.,
                    any portion thereof as to which the service requirements has been
                    satisfied at the date Executive's employment terminated), (y) the portion
                    of each such award that could become vested on the next following
                    anniversary of the date on which it was granted had Executive continued to
                    have been employed and (z) the portion of each such award, if any, that
                    could become vested on the second following anniversary of the grant date
                    of such award had Executive continued to have been employed, multiplied by
                    the Pro-Ration Fraction.

                                (vii) In the event of a Termination due to Disability, a
                    Termination Without Cause or a Termination for Good Reason, Executive
                    shall be entitled to continued participation in all medical, dental,
                    hospitalization and life insurance

                                                     11


                    coverage and in other employee benefit plans or programs in which he was
                    participating on the date of the termination of his employment until the
                    earlier of (A) the second anniversary (or, in the event Executive receives
                    the Special Payment, the third anniversary) of his termination of
                    employment and (B) the date, or dates, he receives equivalent coverage and
                    benefits under the plans and programs of a subsequent employer (such
                    coverages and benefits to be determined on a coverage-by-coverage, or
                    benefit-by-benefit basis); provided that if Executive is precluded from
                    continuing his participation in any employee plan or program as provided
                    in this Section 8(e)(iv), he shall be provided with the economic
                    equivalent of the benefits provided under the plan or program in which he
                    is unable to participate.

                                (viii) Certain Definitions. For purposes of this Section 8,
                    capitalized terms have the following meanings.

                         "BASIC PAYMENT" means an amount equal to two times the sum of (a)
             the annual Base Salary payable to Executive immediately prior to the end of the
             Employment Period (or in the event a reduction in Base Salary is the basis for a
             Termination for Good Reason, then the Base Salary in effect immediately prior to
             such reduction) and (b) the Target Incentive Compensation for the calendar year
             in which the Employment Period ends pursuant to Section 8(a).

                         "CHANGE OF CONTROL" means the occurrence of any of the following
             events following the date of distribution of the Common Stock to the
             stockholders of Dean in connection with the Spin-Off: (a) any "person" (as such
             term is used in Section 13(d) of the Exchange Act, but specifically excluding
             the Company, any wholly-owned subsidiary of the Company and/or any employee
             benefit plan maintained by the Company or any wholly-owned subsidiary of the
             Company) becomes the "beneficial owner" (as determined pursuant to Rule 13d-3
             under the Exchange Act), directly or indirectly, of securities of the Company
             representing thirty percent (30%) or more of the combined voting power of the
             Company's then outstanding securities; or (b) individuals who currently serve on
             the Board, or whose election to the Board or nomination for election to the
             Board was approved by a vote of at least two-thirds (2/3) of the directors who
             either currently serve on the Board, or whose election or nomination for
             election was previously so approved, cease for any reason to constitute a
             majority of the Board; or (c) the Company or any subsidiary of the Company shall
             merge with or consolidate into any other corporation, other than a merger or
             consolidation which would result in the holders of the voting securities of the
             Company outstanding immediately prior thereto holding immediately thereafter
             securities representing more than sixty percent (60%) of the combined voting
             power of the voting securities of the Company or such surviving entity (or its
             ultimate parent, if applicable) outstanding immediately after such merger or
             consolidation; or (d) the stockholders of the Company approve a plan of complete
             liquidation of the Company or an agreement for the sale or disposition by the
             Company of all or substantially all of the Company's assets, or such a plan is
             commenced.

                                                     12


                         "DATE OF TERMINATION" means (i) if Executive's employment is
             terminated by his death, the date of his death, and (ii) if Executive's
             employment is terminated for any other reason, the date specified in a notice of
             termination delivered to Executive by the Company (or if no such date is
             specified, the date such notice is delivered).

                         "EARNED COMPENSATION" means the sum of (a) any Base Salary earned,
             but unpaid, for services rendered to the Company on or prior to the date on

Source: DEAN FOODS CO, 10-K, March 16, 2005
             which the Employment Period ends pursuant to Section 8(a), (b) any annual
             Incentive Compensation payable for services rendered in the calendar year
             preceding the calendar year in which the Employment Period ends that has not
             been paid on or prior to the date the Employment Period ends (other than (x)
             Base Salary and (y) Incentive Compensation deferred pursuant to Executive's
             election), (c) any accrued but unused vacation days and (d) any business
             expenses incurred on or prior to the date of the Executive's termination that
             are eligible for reimbursement in accordance with the Company's expense
             reimbursement policies as then in effect.

                         "SPECIAL PAYMENT" means an amount equal to three times the sum of
             (a) the annual Base Salary payable to Executive immediately prior to the end of
             the Employment Period (or in the event a reduction in Base Salary is the basis
             for a Termination for Good Reason, then the Base Salary in effect immediately
             prior to such reduction) and (b) the Target Incentive Compensation for the
             calendar year in which the Employment Period ends pursuant to Section 8(a).

                         "TARGET INCENTIVE COMPENSATION" means with respect to any calendar
             year the annual Incentive Compensation Executive would have been entitled to
             receive under Section 4(b) for such calendar year had he remained employed by
             the Company for the entire calendar year and assuming that all targets for such
             calendar year had been met.

                         "VESTED BENEFITS" means amounts which are vested or which Executive
             is otherwise entitled to receive under the terms of or in accordance with any
             plan, policy, practice or program of, or any contract or agreement with, the
             Company or any of its subsidiaries, at or subsequent to the date of his
             termination without regard to the performance by Executive of further services
             or the resolution of a contingency.

                         (f) Resignation upon Termination. Effective as of any Date of
             Termination under this Section 8, Executive shall resign, in writing, from all
             positions then held by him with the Company and its affiliates.

                         (g) Timing of Payments. Earned Compensation, the Basic Payment and
             the Special Payment shall be paid in a single lump sum as soon as practicable,
             but in no event more than 15 days, following the end of the Employment Period.
             Vested Benefits shall be payable in accordance with the terms of the plan,
             policy, practice, program, contract or agreement under which such benefits have
             accrued.

                                                      13


                         (h) Payment Following a Change of Control. If the aggregate of all
             payments or benefits made or provided to Executive with respect to any of the
             equity compensation provided under Section 5 or Section 6, under Section
             8(e)(iii)(A), if applicable, and under all other plans and programs of the
             Company (the "AGGREGATE PAYMENT") is determined to constitute a Parachute
             Payment, as such term is defined in Section 280G(b)(2) of the Code, the Company
             shall pay to Executive, prior to the time any excise tax imposed by Section 4999
             of the Code (the "EXCISE TAX") is payable with respect to such Aggregate
             Payment, an additional amount which, after the imposition of all income,
             employment and excise taxes thereon, is equal to the Excise Tax on the Aggregate
             Payment. The determination of whether the Aggregate Payment constitutes a
             Parachute Payment and, if so, the amount to be paid to Executive and the time of
             payment pursuant to this Section 8(h) shall be made by the Company's independent
             auditor or, if such independent auditor is unwilling or unable to serve in this
             capacity, such other nationally recognized accounting firm selected by the
             Company with the consent of the person serving as the Chief Executive Officer of
             the Company immediately prior to the Change of Control, which consent shall not
             be unreasonably withheld (the "AUDITOR").

                         (i) Full Discharge of Company Obligations. The amounts payable to
             Executive pursuant to this Section 8 following termination of his employment
             (including amounts payable with respect to Vested Benefits) shall be in full and
             complete satisfaction of Executive's rights under this Agreement and any other
             claims he may have in respect of his employment by the Company or any of its
             subsidiaries other than claims for common law torts or under other contracts
             between Executive and the Company or its subsidiaries. Such amounts shall
             constitute liquidated damages with respect to any and all such rights and claims
             and, upon Executive's receipt of such amounts, the Company shall be released and
             discharged from any and all liability to Executive in connection with this
             Agreement or otherwise in connection with Executive's employment with the
             Company and its subsidiaries and, as a condition to payment of any such amounts
             that are in excess of the Earned Compensation and the Vested Benefits, following
             the Date of Termination and if requested by the Company, Executive shall execute
             a release in favor of the Company in the form approved by the Company.

                           (j) No Mitigation; No Offset. In the event of any termination of

Source: DEAN FOODS CO, 10-K, March 16, 2005
             employment under this Section 8, Executive shall be under no obligation to seek
             other employment and there shall be no offset against amounts due Executive
             under this Agreement on account of any remuneration attributable to any
             subsequent employment that he may obtain except as specifically provided with
             regard to the continuation of benefits in Section 8(e)(v).

                    9. Noncompetition and Confidentiality.

                         (a) Noncompetition. During the Employment Period and, in the event
             that Executive's employment is terminated for any reason other than death, a
             Termination Without Cause or a Termination for Good Reason, for a period of 12
             months following

                                                     14


             the Date of Termination (the "POST-TERMINATION PERIOD"), Executive shall not
             become associated with any entity, whether as a principal, partner, employee,
             consultant or shareholder (other than as a holder of not in excess of 1% of the
             outstanding voting shares of any publicly traded company), that is actively
             engaged in any geographic area in any business which is in competition with a
             business conducted by the Company at the time of the alleged competition and, in
             the case of the Post-Termination Period, at the Date of Termination.

                         (b) Confidentiality. Without the prior written consent of the
             Company, except (i) in the course of carrying out his duties hereunder or (ii)
             to the extent required by an order of a court having competent jurisdiction or
             under subpoena from an appropriate government agency, Executive shall not
             disclose any trade secrets, customer lists, drawings, designs, information
             regarding product development, marketing plans, sales plans, manufacturing
             plans, management organization information (including data and other information
             relating to members of the Board and management), operating policies or manuals,
             business plans, financial records, packaging design or other financial,
             commercial, business or technical information relating to the Company or any of
             its subsidiaries or information designated as confidential or proprietary that
             the Company or any of its subsidiaries may receive belonging to suppliers,
             customers or others who do business with the Company or any of its subsidiaries
             (collectively, "CONFIDENTIAL INFORMATION") to any third person unless such
             Confidential Information has been previously disclosed to the public by the
             Company or has otherwise become available to the public (other than by reason of
             Executive's breach of this Section 9(b)).

                         (c) Company Property. Promptly following termination of Executive's
             employment, Executive shall return to the Company all property of the Company,
             and all copies thereof in Executive's possession or under his control, except
             that Executive may retain his personal notes, diaries, Rolodexes, calendars and
             correspondence.

                         (d) Non-Solicitation of Employees. During the Employment Period and
             during the one year period following any termination of Executive's employment
             for any reason, Executive shall not, except in the course of carrying out his
             duties hereunder, directly or indirectly induce any employee of the Company or
             any of its subsidiaries to terminate employment with such entity, and shall not
             directly or indirectly, either individually or as owner, agent, employee,
             consultant or otherwise, knowingly employ or offer employment to any person who
             is or was employed by the Company or a subsidiary thereof unless such person
             shall have ceased to be employed by such entity for a period of at least 6
             months.

                         (e) Injunctive Relief with Respect to Covenants. Executive
             acknowledges and agrees that the covenants and obligations of Executive with
             respect to noncompetition, nonsolicitation, confidentiality and Company property
             relate to special, unique and extraordinary matters and that a violation of any
             of the terms of such covenants and obligations may cause the Company irreparable
             injury for which adequate

                                                     15


             remedies are not available at law. Therefore, Executive agrees that the Company
             shall be entitled to an injunction, restraining order or such other equitable
             relief restraining Executive from committing any violation of the covenants and
             obligations contained in this Section 9. These injunctive remedies are
             cumulative and are in addition to any other rights and remedies the Company may
             have at law or in equity.

                    10. Miscellaneous.

                         (a) Survival. Sections 7(d) (relating to the Company's obligation to
             indemnify Executive), 8 (relating to early termination), 9 (relating to

Source: DEAN FOODS CO, 10-K, March 16, 2005
             noncompetition, nonsolicitation and confidentiality) and 10(o) (relating to
             governing law) shall survive the termination hereof, whether such termination
             shall be by expiration of the Employment Period or an early termination pursuant
             to Section 8 hereof.

                         (b) Binding Effect. This Agreement shall be binding on, and shall
             inure to the benefit of, the Company and any person or entity that succeeds to
             the interest of the Company (regardless of whether such succession does or does
             not occur by operation of law) by reason of a merger, consolidation or
             reorganization involving the Company or a sale of all or substantially all of
             the assets of the Company, provided that the assignee or transferee is the
             successor to all or substantially all of the assets of the Company and such
             assignee or transferee assumes the liabilities, obligations and duties of the
             Company, as contained in this Agreement, either contractually or as a matter of
             law. The Company further agrees that, in the event of a sale of assets as
             described in the preceding sentence, it shall use its reasonable best efforts to
             cause such assignee or transferee to expressly assume the liabilities,
             obligations and duties of the Company hereunder. This Agreement shall also inure
             to the benefit of Executive's heirs, executors, administrators and legal
             representatives and beneficiaries as provided in Section 10(d).

                         (c) Assignment. Except as provided under Section 10(b), neither this
             Agreement nor any of the rights or obligations hereunder shall be assigned or
             delegated by any party hereto without the prior written consent of the other
             party.

                         (d) Beneficiaries/References. Executive shall be entitled, to the
             extent permitted under any applicable law and the terms of any applicable plan,
             to select and change a beneficiary or beneficiaries to receive any compensation
             or benefit payable hereunder following Executive's death by giving the Company
             written notice thereof. In the event of Executive's death or a judicial
             determination of his incompetence, reference in this Agreement to Executive
             shall be deemed, where appropriate, to refer to his beneficiary, estate or other
             legal representative.

                         (e) Resolution of Disputes. Any disputes arising under or in
             connection with this Agreement shall, at the election of Executive or the
             Company, be resolved by binding arbitration, to be held in Chicago, Illinois in
             accordance with the rules and procedures of the American Arbitration
             Association. Judgment upon the award rendered by the arbitrator(s) may be
             entered in any court having jurisdiction thereof. Costs of the

                                                    16


             arbitration shall be borne by the Company. Unless the arbitrator determines that
             Executive did not have a reasonable basis for asserting his position with
             respect to the dispute in question, the Company shall also reimburse Executive
             for his reasonable attorneys' fees incurred with respect to any arbitration.
             Pending the resolution of any arbitration or court proceeding, the Company shall
             continue payment of all amounts due Executive under this Agreement and all
             benefits to which Executive is entitled at the time the dispute arises (other
             than the amounts which are the subject of such dispute).

                         (f) Entire Agreement. This Agreement constitutes the entire
             agreement between the parties hereto with respect to the matters referred to
             herein. No amendment to this Agreement shall be binding between the parties
             unless it is in writing and signed by the party against whom enforcement is
             sought. There are no promises, representations, inducements or statements
             between the parties other than those that are expressly contained herein.
             Executive acknowledges that he is entering into this Agreement of his own free
             will and accord, and with no duress, that he has been represented and fully
             advised by competent counsel in entering into this Agreement, that he has read
             this Agreement and that he understands it and its legal consequences.

                         (g) Representations. Executive represents that his employment
             hereunder and compliance by him with the terms and conditions of this Agreement
             will not conflict with or result in the breach of any agreement to which he is a
             party or by which he may be bound. The Company is a corporation duly organized,
             validly existing and in good standing under the laws of the State of Delaware.
             The Company has the full corporate power and authority to execute and deliver
             this Agreement. The Company has taken all action required by law, the
             Certificate of Incorporation, its By-Laws or otherwise required to be taken by
             it to authorize the execution, delivery and performance by it of this Agreement.
             This Agreement is a valid and binding obligation of the Company, enforceable
             against the Company in accordance with its terms.

                         (h) Severability; Reformation. In the event that one or more of the
             provisions of this Agreement shall become invalid, illegal or unenforceable in
             any respect, the validity, legality and enforceability of the remaining

Source: DEAN FOODS CO, 10-K, March 16, 2005
             provisions contained herein shall not be affected thereby. In the event any of
             Section 9(a), (b) or (d) is not enforceable in accordance with its terms,
             Executive and the Company agree that such Section shall be reformed to make such
             Section enforceable in a manner which provides the Company the maximum rights
             permitted at law.

                         (i) Waiver. Waiver by any party hereto of any breach or default by
             the other party of any of the terms of this Agreement shall not operate as a
             waiver of any other breach or default, whether similar to or different from the
             breach or default waived. No waiver of any provision of this Agreement shall be
             implied from any course of dealing between the parties hereto or from any
             failure by either party hereto to assert its or his rights hereunder on any
             occasion or series of occasions.

                                                           17


                         (j) Notices. Any notice required or desired to be delivered under
             this Agreement shall be in writing and shall be delivered personally, by courier
             service, by registered mail, return receipt requested, or by telecopy and shall
             be effective upon actual receipt when delivered or sent by telecopy and upon
             mailing when sent by registered mail, and shall be addressed as follows (or to
             such other address as the party entitled to notice shall hereafter designate in
             accordance with the terms hereof):

                           If to the Company:

                                      857-897 School Place
                                      P.O. Box 19057
                                      Green Bay, Wisconsin 54307
                                      Attention: General Counsel
                                      Telecopy No.: (920) 497-4604

                                      prior to the Registration Date, with a copy to:

                                      Dean Foods Company
                                      2515 McKinney Avenue
                                      Suite 1200
                                      Dallas, Texas 75201
                                      Attention: General Counsel
                                      Telecopy No.: (214) 303-3413

                           If to Executive:

                                      19 Indian Hill Road
                                      Winnetka, Illinois 60093

                                      with a copy to:

                                      Vedder, Price, Kaufman & Kammholz, P.C.
                                      222 N. LaSalle Street
                                      Chicago, Illinois 60601
                                      Attention: Robert J. Stucker, Esq.
                                                  Thomas P. Desmond, Esq.

                         (k) Amendments. This Agreement may not be altered, modified or
             amended except by a written instrument signed by each of the parties hereto.

                         (l) Headings. Headings to Sections in this Agreement are for the
             convenience of the parties only and are not intended to be part of or to affect
             the meaning or interpretation hereof.

                                                           18


                         (m) Counterparts. This Agreement may be executed in counterparts,
             each of which shall be deemed an original but all of which together shall
             constitute one and the same instrument.

                         (n) Withholding. Any payments provided for herein shall be reduced
             by any amounts required to be withheld by the Company from time to time under
             applicable federal, state or local income or employment tax laws or similar
             statutes or other provisions of law then in effect.

                         (o) Governing Law. This Agreement shall be governed by the laws of
             the State of Delaware, without reference to principles of conflicts or choice of
             law under which the law of any other jurisdiction would apply.

                                              -- Signature page follows --


Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                      19


                   IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
             by its duly authorized officer and Executive has hereunto set his hand as of the
             day and year first above written.

                                                                    DEAN SPECIALTY FOODS
                                                                        HOLDINGS, INC.

                                                                      By:_______________
                                                                         Name:
                                                                         Title:

                                                                    EXECUTIVE:

                                                                    ____________________
                                                                    Thomas E. O'Neill

                                                      20


                                                                                     Schedule A

             On each of January 31, 2006, January 31, 2007 and January 31, 2008, one-third of
             the Basic Restricted Shares shall vest, provided that the Company's Total
             Shareholder Return for the period commencing on the fourth trading day following
             the Registration Date (the "COMMENCEMENT DATE") and ending on such January 31st
             equals or exceeds the median of the Total Shareholder Return for such period for
             the companies in the Selected Peer Group (as defined below).

             In addition, on each of January 31, 2007, January 31, 2008, January 31, 2009 and
             January 31, 2010, any Basic Restricted Shares that could have vested, but that
             did not vest, on any preceding January 31st shall vest on such subsequent date
             if the Company's Total Shareholder Return for the period from the Commencement
             Date through the applicable January 31st shall equal or exceed the median of the
             Total Shareholder Return for such period for the companies in the Selected Peer
             Group.

             As used herein, "TOTAL SHAREHOLDER RETURN" shall mean the percentage return
             received by all shareholders of the relevant company during the applicable
             measurement period, including stock price appreciation and dividends, and shall
             be calculated as follows:

              Ending Stock Price (1) - Beginning Stock Price (2) + Dividend Reinvestment (3)
             --------------------------------------------------------------------------------
                                         Beginning Stock Price (2)

                    (1)    With respect to each of the Company and each company in the Selected
                           Peer Group, the average of the closing prices of its common stock
                           for the 20 consecutive trading day period ending on the applicable
                           January 31st (or if the applicable January 31 is not a trading date,
                           the immediately preceding trading date).

                    (2)    With respect to each of the Company and each company in the Selected
                           Peer Group, the average of the closing prices of its common stock on
                           the Registration Date and each of the four consecutive trading days
                           immediately following the Registration Date.

                    (3)    Assumes any dividends paid on the common stock of the Company or any
                           company in the Selected Peer Group are used to purchase its common
                           stock at the closing stock price on the date that such dividends are
                           payable, and includes the value of such additional shares of such
                           common stock (based on the Ending Stock Price for such common
                           stock).

             As used herein, "SELECTED PEER GROUP" shall mean 20 or more companies selected
             by the Board of Directors of the Company (or any authorized committee thereof)
             from

                                                      21


             among packaged food companies whose securities are registered to trade on a U.S.
             national securities exchange or automated quotation system (including, but not
             limited to NASDAQ) (the "PEER COMPANIES") on or as soon as practicable after the
             Registration Date; provided that in no event shall any Ineligible Company be
             selected to be a member of the Selected Peer Group. An "INELIGIBLE Company"
             shall mean any Peer Company (i) in which significant portion of its voting
             securities is held by another corporate entity (other than an open-ended

Source: DEAN FOODS CO, 10-K, March 16, 2005
             investment company); (ii) has filed for protection under the Federal bankruptcy
             law or any similar law, (iii) which is not organized, based and majority-owned
             in the United States, (iv) is party to any agreement the consummation of which
             would cause such Peer Company to cease to be publicly traded (or be described in
             subclause (i) or (iii)), or (v) which has announced an intention to be sold or
             cease to be publicly traded or to take actions which would cause it to be
             described in subclause (i) or (iii). To the extent that any Peer Company
             initially selected as part of the Selected Peer Group with respect to a
             measurement period shall become an Ineligible Company prior to the end of such
             period, such company shall be excluded from the Selected Peer Group for such
             period. The Selected Peer Group will be reviewed annually to determine whether
             any of its members shall have become Ineligible Companies.

                                                    22




Source: DEAN FOODS CO, 10-K, March 16, 2005
                                                                                EXHIBIT 10.17

                                              EMPLOYMENT AGREEMENT

                       EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of January 27,
             2005, by and between Dean Specialty Foods Holdings, Inc., a Delaware
             corporation (the "COMPANY"), and Harry J. Walsh (the "EXECUTIVE").

                                              W I T N E S S E T H:

                    WHEREAS, the Company's parent corporation, Dean Foods Company ("DEAN"),
             intends, subject to certain conditions, to distribute the common stock, par
             value $.01 per share, of the Company (the "COMMON STOCK") owned by Dean to its
             shareholders, whereby the Company would become a stand-alone publicly traded
             corporation;

                    WHEREAS, Executive is willing to enter into this Agreement in
             anticipation of the Company becoming a stand-alone publicly traded corporation
             through the distribution of the Common Stock to Dean's shareholders;

                    WHEREAS, to effect such a spin-off and to position the Company to
             maximize its value for Dean's shareholders, it is necessary that the Company
             have a strong and experienced management team with a proven track record in
             developing and growing a company in the consumer packaged goods industry;

                    WHEREAS, Executive is one of several members of a management team (the
             "TEAM") that possesses the skills and experience necessary to undertake the
             challenges of developing the Company, including through acquisitions;

                    WHEREAS, in light of these skills and experience, the Company desires to
             secure the services of Executive and the other members of the Team, and is
             willing to enter into this Agreement embodying the terms of the employment of
             Executive by the Company, which terms include one or more substantial equity-
             based compensation awards; and

                    WHEREAS, Executive is willing to accept such employment and enter into
             such Agreement, subject to Dean making available to Executive and to the other
             members of the Team the opportunity to invest in the common stock of the
             Company and making the undertakings regarding the governance and management of
             the Company set forth in the in the stockholders agreement (the "STOCKHOLDERS
             AGREEMENT") to be entered into by the Company, Dean, Executive, other members
             of the Team, and certain other investors who are affiliates of the Team
             contemporaneously with this Agreement; and

                    WHEREAS, in order to give Executive and the Team the opportunity to
             acquire an equity interest in the Company and as an incentive for Executive to
             participate in the affairs of the Company, the Company is willing to sell to
             Executive, and Executive

                                                         1


             desires to purchase, shares of common stock (the "COMMON STOCK"), subject to the
             terms and conditions set forth in the Subscription Agreement (the "SUBSCRIPTION
             AGREEMENT") to be entered into contemporaneously with this Agreement and in the
             Stockholders Agreement.

                    NOW, THEREFORE, in consideration of the mutual covenants herein
             contained, the Company and Executive hereby agree as follows:

                1. Employment. Upon the terms and subject to the conditions of this
             Agreement and, unless earlier terminated as provided in Section 8, the Company
             hereby employs Executive and Executive hereby accepts employment by the Company
             for the period (i) commencing on the date hereof (the "COMMENCEMENT DATE") and
             (ii) ending on the third anniversary of (A) the Commencement Date or, (B) if
             the Common Stock shall become registered under Section 12(g) of the Securities
             Exchange Act of 1934, as amended (the "EXCHANGE ACT"), during the term hereof,
             the third anniversary of the date such registration shall have become effective
             and trading of Common Stock on a registered national securities exchange or
             automated quotation system (including, but not limited to, NASDAQ) shall have
             commenced (the "REGISTRATION DATE"); provided, however, that the term of this
             Agreement shall automatically be extended for one additional year on the third
             anniversary of the Registration Date and each subsequent anniversary thereof
             unless not less than 90 days prior to such anniversary date either party shall
             give the other written notice that he or it does not want the term to extend as
             of such anniversary date. The period during which Executive is employed
             pursuant to this Agreement (including pursuant to any extension of the term
             hereof pursuant to the proviso in the immediately preceding sentence) shall be

Source: DEAN FOODS CO, 10-K, March 16, 2005
             referred to herein as the "EMPLOYMENT PERIOD."

                2. Position and Duties. During the Employment Period, Executive shall
             serve as the Senior Vice President of Operations of the Company and in such
             other position or positions with the Company and its majority-owned
             subsidiaries consistent with the foregoing position as the Board of Directors
             of the Company (the "BOARD") may specify or the Company and Executive may
             mutually agree upon from time to time. During the Employment Period, Executive
             shall have the duties, responsibilities and obligations customarily assigned to
             individuals at comparable publicly traded companies serving in the position or
             positions in which Executive serves hereunder. Executive shall devote
             substantially all his business time to the services required of him hereunder,
             except for vacation time and reasonable periods of absence due to sickness,
             personal injury or other disability, and shall perform such services to the
             best of his abilities. Subject to the provisions of Section 9, nothing herein
             shall preclude Executive from (i) engaging in charitable activities and
             community affairs, (ii) managing his personal investments and affairs or (iii)
             serving on the board of directors or other governing body of any corporate or
             other business entity, so long as such service is not in violation of the
             covenants contained in Section 9 or the governance principles established for
             the Company by the Board, as in effect from time to time, provided that in no
             event may such activities, either

                                                     2


             individually or in the aggregate, materially interfere with the proper
             performance of Executive's duties and responsibilities hereunder.

                3. Place of Performance. The Company shall establish its headquarters
             office in Chicago, Illinois metropolitan area at which Executive shall have his
             principal office. Executive shall also have an office, and perform services
             at, the Company's offices in Green Bay, Wisconsin, on such basis as Executive
             deems necessary or appropriate for the performance of his duties.

                4.   Compensation.

                     (a) Base Salary. During the Employment Period, the Company shall pay
             Executive a base salary at the annual rate of $350,000. Beginning in 2006,
             the Board shall review Executive's base salary no less frequently than annually
             and may increase such base salary in its discretion. The amount of annual base
             salary payable under this Section 4(a) shall be reduced, however, to the extent
             Executive elects to defer such salary under the terms of any deferred
             compensation or savings plan or arrangement maintained or established by the
             Company or any of its subsidiaries. Executive's annual base salary payable
             hereunder, including any increased annual base salary, without reduction for
             any amounts deferred as described above, is referred to herein as "BASE
             SALARY". The Company shall pay Executive the portion of his Base Salary not
             deferred in accordance with its standard payroll practices, but no less
             frequently than in equal monthly installments.

                     (b) Incentive Compensation. For each full calendar year during the
             Employment Period, Executive shall be eligible to receive an annual incentive
             bonus from the Company, with a target bonus opportunity of not less than 60% of
             his Base Salary, which will be payable, if at all, upon the achievement by
             Executive and/or the Company of performance objectives to be established by the
             Board in consultation with the Company's Chief Executive Officer and
             communicated to Executive during the first quarter of such year (the "INCENTIVE
             COMPENSATION"). Without limiting the generality of the foregoing, the actual
             amount payable to Executive in respect of the Incentive Compensation may be
             more or less than the targeted opportunity (including zero) based on the actual
             results against the pre-established performance objectives.

                5. Stock Purchase. Substantially contemporaneously with the Commencement
             Date, Executive shall purchase the number of shares of Common Stock of the
             Company specified in the Subscription Agreement related to the purchase of such
             shares, to be entered into by Executive and the Company (the "SUBSCRIPTION
             AGREEMENT"). The terms and conditions of such purchase shall be as set forth
             in the Subscription Agreement, and such shares shall be subject to the
             limitations and restrictions, including, without limitation, the restrictions
             on transfer and the put and call rights set forth in the Stockholders
             Agreement.

                                                     3


                6.   Public Equity Awards.

                     (a) Basic Restricted Stock Grant. On the fourth trading day following
             the Registration Date, the Company shall grant Executive an award of that

Source: DEAN FOODS CO, 10-K, March 16, 2005
             number of whole restricted shares of Common Stock (the "BASIC RESTRICTED
             SHARES") as is equal to (or most closely approximates) 0.30% of the Outstanding
             Common Stock on the date of grant. The Basic Restricted Shares shall vest and
             become freely transferable in the proportions, and based upon achievement of
             the total shareholder return objectives, determined pursuant to Schedule A
             hereto, so long as Executive is continuously employed by the Company through
             the applicable vesting date. Any Basic Restricted Shares that have not become
             vested and freely transferable on or before the fifth anniversary of the grant
             date shall be forfeited. For purposes of this Agreement, "OUTSTANDING COMMON
             STOCK" shall mean the sum of (x) the number of shares Common Stock that are
             issued and outstanding on the Registration Date and (y) the number of shares of
             Common Stock issuable pursuant to any stock options granted by Dean prior to
             the Registration Date in respect of its common stock and converted into the
             right to purchase Common Stock in connection with or in contemplation of the
             Spin-Off.

                     (b) Supplemental Restricted Stock Unit Grant. On the fourth trading
             day following the Registration Date, Executive shall be granted, automatically
             and without any further action on the part of the Company or the Board, an
             award of restricted stock units, with each such unit representing a right to
             receive one share of Common Stock on the terms and conditions set forth herein
             (the "SUPPLEMENTAL RESTRICTED SHARE UNITS"). The number of Supplemental
             Restricted Share Units subject to such grant shall be equal to the quotient
             (rounded up to the nearest whole number) obtained by dividing (x) by (y), where
             (x) and (y) are:

                      (x)      the product of (i) the excess, if any, of (A) the Initial Fair
                               Market Value over (B) the Adjusted Per Share Purchase Price and
                               (ii) that number of whole shares of Common Stock as is equal to
                               (or most closely approximates) 0.90% of the Outstanding Common
                               Stock on the date of grant; and


                      (y)      the Initial Fair Market Value.

                    For purposes of this Agreement, "INITIAL FAIR MARKET VALUE" shall mean
             the average of the closing values on the Registration Date and on each of the
             next four trading days immediately following the Registration Date, as reported
             on the principal exchange or automated quotation system on which the Common
             Stock is traded or reported. "ADJUSTED PER SHARE PURCHASE PRICE" shall mean
             the $5,000 purchase price per share of Common Stock, appropriately adjusted to
             reflect any stock split or share combination involving the Common Stock, any
             recapitalization of the Company, any adjustment pursuant to Section 4.3(b) of
             the Stockholders Agreement, or any merger, consolidation, reorganization or
             similar corporate event involving the Company occurring

                                                        4


             on or after the Commencement Date and on or before the Registration Date.



                   The Supplemental Restricted Share Units shall vest in three equal annual
             installments on the first three anniversaries of the Registration Date, so long
             as (with respect to each installment) Executive is continuously employed by the
             Company through the applicable anniversary date. Notwithstanding the foregoing,
             no Supplemental Restricted Share Units shall become vested on any such
             anniversary date if, on such date, the average of the closing prices of a share
             of Common Stock on the principal trading market on which such shares are traded
             or reported for the 20 trading day period ended on such date (or, if such date
             is not a business day, the 20 trading day period ended on the last trading day
             occurring immediately prior thereto) does not exceed the Initial Fair Market
             Value (the "MINIMUM VALUE REQUIREMENT"). In the event that the Minimum Value
             Requirement is not satisfied on any applicable anniversary date, the
             Supplemental Restricted Share Units that would otherwise have vested on such
             anniversary date shall vest on any subsequent anniversary date or on any date
             after the third anniversary date (treating each such date as an anniversary date
             for purposes of the 20 day trading measurement period) on which both Executive
             is still an employee of the Company and the Minimum Value Requirement is
             satisfied; provided that any such Supplemental Restricted Share Units that have
             not become vested on or before the fifth anniversary of the grant date shall be
             forfeited. The shares of Common Stock corresponding to any vested Supplemental
             Restricted Share Units, if any, shall be distributed to Executive as soon as
             practicable, but not later than five (5) business days following the earlier to
             occur of (i) the fifth anniversary of the date of grant or (ii) the sixth month
             anniversary of the date Executive's employment with the Company terminates,
             unless the Executive elects (in a manner consistent with the applicable
             requirements of Section 409A of the Internal Revenue Code (the "CODE")) to defer
             the date upon which the shares of Common Stock corresponding to the vested

Source: DEAN FOODS CO, 10-K, March 16, 2005
             Supplement Restricted Share Units shall be distributed.

                     (c) Stock Option. On the fourth trading day following the
             Registration Date, the Company shall automatically and without any further
             action on the part of the Company or the Board grant to Executive a non-
             qualified stock option to purchase the number of shares of Common Stock equal
             to the remainder of (i) the number of whole shares of Common Stock specified in
             Section 6(b)(x)(ii) minus (ii) the number of Supplemental Restricted Share
             Units awarded pursuant to Section 6(b) (the "OPTION"). The exercise price per
             share with respect to the Option shall be equal to the Initial Fair Market
             Value. The Option shall become vested and exercisable in three approximately
             equal annual installments on each of the first three anniversaries of the grant
             date of such Option, so long as Executive is continuously employed by the
             Company through the applicable anniversary date.

                     (d) Stock Incentive Plan. Each of the Basic Restricted Shares, the
             Supplemental Restricted Shares and the Option shall be granted pursuant to a
             stock incentive plan (the "INCENTIVE PLAN") to be adopted by the Company prior
             to the Registration Date that will authorize for issuance thereunder at least
             (i) 13% of the

                                                      5


             Outstanding Common Stock plus (ii) the number of shares of Common Stock issuable
             pursuant to any stock options granted by Dean prior to the Registration Date in
             respect of its common stock and converted into the right to purchase Common
             Stock in connection with or in contemplation of the Spin-Off as provided in the
             Stockholders Agreement. Such Incentive Plan shall have terms and conditions
             which will permit the issuance of the awards to the Executive specified in this
             Section 6 and shall not contain any other term or condition that has an adverse
             effect on any award to be made to Executive pursuant to this Section 6.

                     (e) Award Agreements. Each of the Basic Restricted Shares,
             Supplemental Restricted Shares and the Option shall be subject to an award
             agreement having the terms and conditions specified in the preceding
             subparagraphs of this Section 6 and otherwise consistent with the terms and
             conditions of the Incentive Plan. Each such agreement shall provide for full
             vesting of such awards upon a Change of Control and shall provide that
             Executive shall have the right to elect that any applicable tax withholding
             requirements with respect to the vesting, exercise or distribution of Common
             Stock be satisfied by having the Company withhold shares of Common Stock
             subject to such award having a value equal to the minimum required applicable
             tax withholding, and that Executive may exercise the Option using previously
             owned shares of Common Stock, including Basic Restricted Shares that are still
             subject to forfeiture, provided that that number of shares deliverable upon
             exercise of the Option that corresponds to the number of unvested Basic
             Restricted Shares surrendered will be subject to the same forfeiture provisions
             and restrictions on transfer as the Basic Restricted Shares surrendered to
             exercise such Option, in whole or in part.

                     (f) Capital Adjustments. Notwithstanding anything to the contrary
             contained in Section 5 or this Section 6, the exercise price of, and the number
             of Shares subject to, the Option, the number of Units subject to the
             Supplemental Restricted Share Units, and the Minimum Value Requirement shall be
             appropriately adjusted, by the Board in its sole discretion, to reflect any
             extraordinary dividend, any dividend payable in shares of capital stock, any
             stock split or share combination involving the Common Stock, any
             recapitalization of the Company, any merger, consolidation, reorganization or
             similar corporate event involving the Company occurring after the Registration
             Date.

                     (g) Impact on Future Grants. Unless following the Registration Date
             the Board shall determine that special circumstances warrant the grant of such
             additional awards as it or any duly authorized committee thereof shall, in its
             sole discretion, determine, it is the intent and expectation of the parties
             that Executive will not receive any further grants of equity-based compensation
             prior to the third anniversary of the Commencement Date. Following such third
             anniversary, Executive shall be eligible to receive equity-based compensation
             awards in accordance the Company's generally applicable compensation practices,
             as then in effect.

                                                      6


                7.   Benefits, Perquisites and Expenses.

                     (a) Benefits. During the Employment Period, Executive shall be
             eligible to participate in (i) each welfare benefit plan sponsored or
             maintained by the Company for its senior executive officers, including, without

Source: DEAN FOODS CO, 10-K, March 16, 2005
             limitation, each group life, hospitalization, medical, dental, health, accident
             or disability insurance or similar plan or program of the Company, and (ii)
             each pension, profit sharing, retirement, deferred compensation or savings plan
             sponsored or maintained by the Company for its senior executive officers, in
             each case, whether now existing or established hereafter, in accordance with
             the generally applicable provisions thereof, as the same may be amended from
             time to time.

                     (b) Perquisites. During the Employment Period, Executive shall be
             entitled to receive such perquisites as are generally provided to other senior
             executive officers of the Company in accordance with the then current policies
             and practices of the Company.

                     (c) Business Expenses. During the Employment Period, the Company
             shall pay or reimburse Executive for all reasonable expenses incurred or paid
             by Executive in the performance of Executive's duties hereunder, upon
             presentation of expense statements or vouchers and such other information as
             the Company may require and in accordance with the generally applicable
             policies and procedures of the Company.

                     (d) Indemnification. The Company agrees that if Executive is made a
             party, or is threatened to be made a party, to any action, suit or proceeding,
             whether civil, criminal, administrative or investigative (a "PROCEEDING"), by
             reason of the fact that he is or was a director, officer or employee of the
             Company or any subsidiary or affiliate thereof, or is or was serving at the
             request of the Company as a director, officer, member, employee or agent of
             another corporation, partnership, joint venture, trust or other enterprise,
             including, in each case, service with respect to employee benefit plans,
             whether or not the basis of such Proceeding is Executive's alleged action in an
             official capacity while serving as a director, officer, member, employee or
             agent, Executive shall be indemnified and held harmless by the Company to the
             fullest extent legally permitted or authorized by the Company's certificate of
             incorporation or by-laws or resolutions of the Board or, if greater, by the
             laws of the State of Delaware, against all cost, expense, liability and loss
             (including, without limitation, attorney's fees, judgments, fines or penalties
             and amounts paid or to be paid in settlement) reasonably incurred or suffered
             by Executive in connection therewith, and such indemnification shall continue
             as to Executive even if he has ceased to be a director, officer, member,
             employee or agent of the Company or other entity and shall inure to the benefit
             of Executive's heirs, executors and administrators. If Executive serves as a
             director, officer, member, partner, employee or agent of another corporation,
             partnership, joint venture, limited liability company, trust or other
             enterprise (including, in each case, service with respect to employee benefit
             plans) which is a subsidiary or affiliate of the Company, it shall be presumed
             for purposes of this Section 7(d) that Executive serves or served in such
             capacity at the request of the

                                                     7


             Company. The Company shall advance to Executive all reasonable costs and
             expenses incurred by him in connection with a Proceeding within 30 days after
             receipt by the Company of a written request for such advance. Such request shall
             include an undertaking by Executive to repay the amount of such advance, if it
             shall ultimately be determined that he is not entitled to be indemnified against
             such costs and expenses. The Company agrees to continue and maintain a
             directors' and officers' liability insurance policy covering Executive to the
             extent the Company provides such coverage for its other executive officers or
             directors.

                8.   Termination of Employment.

                     (a) Early Termination of the Employment Period. Notwithstanding
             Section 1, the Employment Period shall end upon the earliest to occur of (i) a
             termination of Executive's employment on account of Executive's death, (ii) a
             Termination due to Disability, (iii) a Termination for Cause, (iv) a
             Termination Without Cause, (v) a Termination for Good Reason, (vi) a
             Termination due to Retirement or (vii) a Voluntary Termination.

                     (b) Termination Due to Death or Disability. In the event that
             Executive's employment hereunder terminates due to his death or as a result of
             a Termination due to Disability (as defined below), no termination benefits
             shall be payable to or in respect of Executive except as provided in Section
             8(e). For purposes of this Agreement, "TERMINATION DUE TO DISABILITY" means a
             termination of Executive's employment upon written notice from the Company
             because Executive has been incapable, regardless of any reasonable
             accommodation by the Company, of substantially fulfilling the positions,
             duties, responsibilities and obligations set forth in this Agreement because of
             physical, mental or emotional incapacity resulting from injury, sickness or
             disease for a period of more than (i) four consecutive months or (ii) an

Source: DEAN FOODS CO, 10-K, March 16, 2005
             aggregate of six months in any twelve month period. Any question as to the
             existence or extent of Executive's disability upon which Executive and the
             Company cannot agree shall be determined by a qualified, independent physician
             jointly selected by the Company and Executive. If the Company and Executive
             cannot agree on the physician to make the determination, then the Company and
             Executive shall each select a physician and those physicians shall jointly
             select a third physician, who shall make the determination. The determination
             of any such physician shall be final and conclusive for all purposes of this
             Agreement. Executive or his legal representative or any adult member of his
             immediate family shall have the right to present to such physician such
             information and arguments as to Executive's disability as he, she or they deem
             appropriate, including the opinion of Executive's personal physician.

                     (c) Termination by the Company. The Company may terminate Executive's
             employment with the Company with or without Cause; provided that prior to the
             Registration Date, the Company may only terminate Executive's employment
             hereunder for Cause. "TERMINATION FOR CAUSE" means a termination of Executive's
             employment

                                                     8


             by the Company due to Cause. "CAUSE" means (i) Executive's conviction
             of a felony or the entering by Executive of a plea of nolo contendere to a
             felony charge, (ii) Executive's gross neglect or willful and intentional gross
             misconduct in the performance of, or willful, substantial and continual refusal
             by Executive in breach of this Agreement to perform, the duties,
             responsibilities or obligations assigned to Executive pursuant to the terms
             hereof, (iii) a TreeHouse Default (as defined in the Stockholders Agreement),
             (iv) any material breach by Executive of Section 9 of this Agreement or (v) a
             material breach by Executive of the Code of Ethics applicable to the Company's
             employees, as in effect from time to time; provided, however, that no act or
             omission shall constitute "Cause" for purposes of this Agreement unless the
             Board provides Executive, within 90 days of the Board learning of such act or
             acts or failure or failures to act, (A) written notice of the intention to
             terminate him for Cause, which notice states in detail clearly and fully the
             particular act or acts or failure or failures to act that constitute the grounds
             on which the Board reasonably believes in good faith constitutes "Cause", and
             (B) an opportunity, within thirty (30) days following Executive's receipt of
             such notice, to meet in person with the Board to explain or defend the alleged
             act or acts or failure or failures to act relied upon by the Board and, to the
             extent such cure is possible, to cure such act or acts or failure or failures to
             act. If such conduct is cured to the reasonable satisfaction of the Board, such
             notice of termination shall be revoked. Further, no act or acts or failure or
             failures to act shall be considered "willful" or "intentional" if taken in good
             faith and Executive reasonably believed such act or acts or failure or failures
             to act were in the best interests of the Company.

                     (d) Termination by Executive. Executive may terminate his employment
             with the Company for Good Reason, for Retirement or in a Voluntary Termination.
             A "TERMINATION FOR GOOD REASON" by Executive means a termination of Executive's
             employment by Executive within 90 days following (i) a reduction in Executive's
             annual Base Salary or target Incentive Compensation opportunity, (ii) the
             failure to elect or reelect Executive to any of the positions described in
             Section 2 above or the removal of him from any such position, (iii) a material
             reduction in Executive's duties and responsibilities or the assignment to
             Executive of duties and responsibilities which are materially inconsistent with
             his duties or which materially impair Executive's ability to function in the
             position specified in Section 2, (iv) a material breach of any material
             provision of this Agreement by the Company, (v) the earlier of (x) October 31,
             2005 (or such later date as the Company and Executive (or Executive's agent
             appointed pursuant to the Stockholders Agreement) shall agree) and (y) the
             Early Termination Date (as defined in the Stockholders Agreement), if the
             Registration Date has not occurred on or before such earlier date other than as
             a result of a TreeHouse Default; (vi) any material breach by the Company or
             Dean of the Stockholders Agreement; (vii) any material breach by the Company of
             any of the award agreements referenced in Section 6(e); or (viii) the failure
             by the Company to obtain the assumption agreement referred to in Section 10(b)
             of this Agreement prior to the effectiveness of any succession referred to
             therein, unless the purchaser, successor or assignee referred to therein is
             bound to perform this Agreement by operation of law. Notwithstanding the
             foregoing, a

                                                     9


             termination shall not be treated as a Termination for Good Reason (i) if
             Executive shall have consented in writing to the occurrence of the event giving
             rise to the claim of Termination for Good Reason (or non-occurrence of the event
             described in clause (v) of this definition) or (ii) unless Executive shall have

Source: DEAN FOODS CO, 10-K, March 16, 2005
             delivered a written notice to the Board within 60 days of his having actual
             knowledge of the occurrence of one of such events stating that he intends to
             terminate his employment for Good Reason and specifying the factual basis for
             such termination, and such event, if capable of being cured, shall not have been
             cured within 10 days of the receipt of such notice. A "TERMINATION DUE TO
             RETIREMENT" means Executive's voluntary termination of employment after having
             (i) completed at least five (5) years of service with the Company and (ii) the
             sum of the Executive's attained age and length of service with the Company is at
             least 62 (or such lower number as the Board shall permit). A "VOLUNTARY
             TERMINATION" shall mean a termination of employment by Executive that is not a
             Termination for Good Reason, a Termination due to Retirement or a Termination
             due to Disability, and which occurs after the Registration Date and on 90th day
             after Executive shall have given the Company written notice of his intent to
             terminate his employment (or as of such later date as Executive shall specify in
             such notice).

                      (e)   Payments and Benefits Upon Certain Terminations.

                        (i)    In the event of the termination of Executive's employment for
                 any reason (including a voluntary termination of employment by Executive
                 which is not a Termination for Good Reason), Executive shall be entitled to
                 any Earned Compensation owed to Executive but not yet paid and the Vested
                 Benefits.


                        (ii)   Except as provided in Section 8(e)(iii), in the event the
                 Employment Period ends by reason of a Termination Without Cause or a
                 Termination for Good Reason, Executive shall receive the Basic Payment.


                        (iii) In lieu of the Basic Payment, in the event the Employment
                 Period ends by reason of a Termination Without Cause or a Termination for
                 Good Reason within the 24 month period immediately following a Change of
                 Control, Executive shall receive the Special Payment.


                        (iv)   In the event that Executive's employment terminates (A) due
                 to his death, a Termination due to Disability or a Termination due to
                 Retirement, in any such case, after the Registration Date, or (B) due to a
                 Termination Without Cause or a Termination for Good Reason, in either case,
                 after the Registration Date and at a time at which Sam Reed is not acting
                 in the capacity of the Company's Chief Executive Officer, (x) any portion
                 of the Option that has not become vested and exercisable prior to such
                 termination of employment shall become vested and exercisable and, to the
                 extent not earlier exercised, the Option shall remain exercisable until the
                 second anniversary of such termination or, if earlier, the expiration of
                 its term, and (y) any Basic Restricted Shares and Supplemental Restricted
                 Shares outstanding on such date of termination shall continue to vest, if
                 at

                                                      10


                 all, in accordance with their terms on the same terms and conditions that
                 would have applied if Executive's employment hereunder had not been
                 terminated.

                        (v)    In the event that Executive's employment terminates due to a
                 Termination Without Cause or a Termination for Good Reason, in either case,
                 after the Registration Date and while Sam Reed is acting in the capacity of
                 the Company's Chief Executive Officer, (A) in addition to any portion of
                 the Option that at such time is vested and exercisable in the ordinary
                 course, upon such termination, the following additional portion of the
                 Option shall become vested and exercisable: (x) the portion of the Option,
                 if any, that would have become vested and exercisable on the next following
                 anniversary of the Option grant date had Executive continued to have been
                 employed plus (y) the portion of the Option, if any, that would become
                 vested on the second following anniversary of the Option grant date had
                 Executive continued to have been employed times a fraction (the "PRO-RATION
                 FRACTION"), the numerator of which is the number of days Executive was
                 employed since the last anniversary of such grant date through (and
                 including) the termination date and the denominator of which is 365, and
                 (B) any portion of the Option that is vested and exercisable on the
                 termination date (including the portion thereof that vests and becomes
                 exercisable on such date pursuant to subclause (A)) shall be and remain
                 exercisable (unless earlier exercised) until the second anniversary of the
                 termination date.

                        (vi)   In the event that Executive's employment terminates due to a
                 Termination Without Cause or a Termination for Good Reason, in either case,

Source: DEAN FOODS CO, 10-K, March 16, 2005
                 after the Registration Date and while Sam Reed is acting in the capacity of
                 the Company's Chief Executive Officer, in addition to any portion thereof
                 that became vested in the ordinary course prior to the date of such
                 termination, the following additional portion of the Basic Restricted
                 Shares and Supplemental Restricted Share Units may continue to vest in
                 accordance with its terms on the same basis as would have applied had
                 Executive's employment not terminated: (x) any portion of the Basic
                 Restricted Share award and the Supplemental Restricted Share Units award
                 that had not become vested as of the termination date solely because the
                 performance criteria applicable thereto had not yet been satisfied (i.e.,
                 any portion thereof as to which the service requirements has been satisfied
                 at the date Executive's employment terminated), (y) the portion of each
                 such award that could become vested on the next following anniversary of
                 the date on which it was granted had Executive continued to have been
                 employed and (z) the portion of each such award, if any, that could become
                 vested on the second following anniversary of the grant date of such award
                 had Executive continued to have been employed, multiplied by the Pro-Ration
                 Fraction.

                        (vii) In the event of a Termination due to Disability, a
                 Termination Without Cause or a Termination for Good Reason, Executive shall
                 be entitled to continued participation in all medical, dental,
                 hospitalization and life insurance

                                                    11


                 coverage and in other employee benefit plans or programs in which he was
                 participating on the date of the termination of his employment until the
                 earlier of (A) the second anniversary (or, in the event Executive receives
                 the Special Payment, the third anniversary) of his termination of
                 employment and (B) the date, or dates, he receives equivalent coverage and
                 benefits under the plans and programs of a subsequent employer (such
                 coverages and benefits to be determined on a coverage-by-coverage, or
                 benefit-by-benefit basis); provided that if Executive is precluded from
                 continuing his participation in any employee plan or program as provided in
                 this Section 8(e)(iv), he shall be provided with the economic equivalent of
                 the benefits provided under the plan or program in which he is unable to
                 participate.


                        (viii) Certain Definitions. For purposes of this Section 8,
                 capitalized terms have the following meanings.

                    "BASIC PAYMENT" means an amount equal to two times the sum of (a) the
             annual Base Salary payable to Executive immediately prior to the end of the
             Employment Period (or in the event a reduction in Base Salary is the basis for
             a Termination for Good Reason, then the Base Salary in effect immediately prior
             to such reduction) and (b) the Target Incentive Compensation for the calendar
             year in which the Employment Period ends pursuant to Section 8(a).

                    "CHANGE OF CONTROL" means the occurrence of any of the following events
             following the date of distribution of the Common Stock to the stockholders of
             Dean in connection with the Spin-Off: (a) any "person" (as such term is used in
             Section 13(d) of the Exchange Act, but specifically excluding the Company, any
             wholly-owned subsidiary of the Company and/or any employee benefit plan
             maintained by the Company or any wholly-owned subsidiary of the Company)
             becomes the "beneficial owner" (as determined pursuant to Rule 13d-3 under the
             Exchange Act), directly or indirectly, of securities of the Company
             representing thirty percent (30%) or more of the combined voting power of the
             Company's then outstanding securities; or (b) individuals who currently serve
             on the Board, or whose election to the Board or nomination for election to the
             Board was approved by a vote of at least two-thirds (2/3) of the directors who
             either currently serve on the Board, or whose election or nomination for
             election was previously so approved, cease for any reason to constitute a
             majority of the Board; or (c) the Company or any subsidiary of the Company
             shall merge with or consolidate into any other corporation, other than a merger
             or consolidation which would result in the holders of the voting securities of
             the Company outstanding immediately prior thereto holding immediately
             thereafter securities representing more than sixty percent (60%) of the
             combined voting power of the voting securities of the Company or such surviving
             entity (or its ultimate parent, if applicable) outstanding immediately after
             such merger or consolidation; or (d) the stockholders of the Company approve a
             plan of complete liquidation of the Company or an agreement for the sale or